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Dan-78
Returning Member

Backdoor Roth conversion from IRA, followed by Roth withdrawal, both in the 2020 tax year

Hi, 

In 2020 I did a backdoor IRA to Roth IRA conversion. I got a 1099-R on the IRA distribution, and of course I owe taxes on that. Then, later I withdrew the money from the Roth IRA. I got a 1099-R on the Roth distribution, and I do not owe any taxes on that amount since I paid the taxes when it came out of the IRA. 

 

My question is, how do I keep the income from showing up twice? Even though it's not taxed, it is counted twice as income. 

To explain further, let's say I did a $25,000 IRA to Roth conversion in 2020. So I owe taxes on the $25,000 I took out of my IRA. Then I took that same $25,000 out of my Roth account. I don't owe any taxes on it since it came out of a Roth account. BUT, my income is shown as $50,000 higher ($25K from IRA + $25K from Roth). Since it's the same $25,000, it should only be counted once. How do I tell Turbotax it's the same money?

 

I'm 64 years old, so no worries about penalties or anything. 

 

Thanks for any help.

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1 Reply

Backdoor Roth conversion from IRA, followed by Roth withdrawal, both in the 2020 tax year

It will show as income on the summary screen which shows gross income, not taxable income.

The IRS requires reporting all income on a *income* tax return - taxable and not-taxable.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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