Old Roth contributions

Forum|Forum|4 years ago
March 9, 2022
3 replies
17 views

I contributed to a Roth for a few years decades ago when they first came out. I am now retired and took my first Roth withdrawal this year. Turbo tax wants to know what my contributions were way back then and I have no idea. What do I answer?

MinhT1

Level 15

If you are older than 59 1/2 and your Roth IRA is more than 5 years old, all your Roth IRA distributions are not taxable.

TurboTax needs to know your prior contributions to calculate if any portion of your distributions may be taxable, but this amount is not reported on your tax return.

If you meet the conditions for your distributions to be non-taxable you can enter a number larger than your distributions and the distributions will not be taxable.

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BearhawkAuthor

Level 2

That sounds very ambiguous. I do meet the requirement for withdrawals so every year I just pick a number for my contributions that is higher than my withdrawals? Why even bother?

ColeenD3

Level 15

The IRS requires information in order to know that you are taking a tax-free distribution. You don't have that information. You are being offered a workaround.

You can always withdraw contributions (but not earnings) that you made to your Roth IRA tax and penalty free at anytime. Additionally, the Ordering rules for withdrawals from a Roth IRA are: first from regular contributions, then from Conversion and rollover contributions, on a first-in, first-out basis and finally from Earnings on contributions.

Please note: A qualified distribution from a Roth IRA is tax-free and penalty-free, provided that the five-year aging requirement has been satisfied and one of the following conditions is met:

Over age 59½
Death or disability
Qualified first-time home purchase

A non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies. For Roth IRAs, you can always remove post-tax penalty contributions (also known as "basis") from your Roth IRA without penalty.

When you are entering this information into TurboTax, your Form 1099-R, box 7 codes J, Q and T identifies a Roth IRA distribution and determines the tax treatment. If you have a J or a T, the distribution is considered taxable unless there is an exception. TurboTax will guide you on all the exceptions.