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cindygo
Level 1

IRA to Roth conversion – No tax is being taken?

I have been converting some of my IRA to Roth for several years knowing I will pay some tax. Each year I receive a 1099-R as I did for 2020 which shows:

Box 1 - the amount converted.

Box 2a – Taxable amount which is the same as Box 1

Box 2b – Taxable amount not determined X

Box 4 – Zero Fed tax withheld

Box 7 – 07, typically this has been 02 but I turned 59 ½ by end of year

IRA/SEP Simple X

I entered the 1099-R into TurboTax and when asked:

Did you take out all of part of the money out before 59 ½? No

Did you inherit the IRA? No

What did you do with the money? Moved to another retirement account.

Choose which of the following applies: I rolled over all of this money.

The next page I see says - We Want to let you Know…. You won’t have to pay tax on your $$$ rollover.

Why?

1040-line 4a IRA Distributions shows the converted funds but 4b Taxable amount is Zero.

This does not seem right.  

 

1 Best answer

Accepted Solutions
SteamTrain
Level 15

IRA to Roth conversion – No tax is being taken?

when I test this in my desktop software:

 

where you selected:

 

Choose which of the following applies:

1)  I rolled over all of this money."

....................Don't....Select instead

2)  I did a combination of rolling over , converting, or cashing out the money

 

.....................then, a box will appear for the Roth conversion

 

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

View solution in original post

2 Replies
SteamTrain
Level 15

IRA to Roth conversion – No tax is being taken?

when I test this in my desktop software:

 

where you selected:

 

Choose which of the following applies:

1)  I rolled over all of this money."

....................Don't....Select instead

2)  I did a combination of rolling over , converting, or cashing out the money

 

.....................then, a box will appear for the Roth conversion

 

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

View solution in original post

cindygo
Level 1

IRA to Roth conversion – No tax is being taken?

Thanks, @SteamTrain  that worked.

Seems like an odd way of getting there but all looks as it should now. Thanks for a quick reply! 

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