IRA to Roth IRA conversion

[Geezrr]

I am retired and have no earned income. I'd like to convert some of my Traditional IRA investments (made in previous years) to a Roth IRA. I did not contribute to my IRA in 2022 so I assume I should enter $0 as a response to that question.  When I enter the rest of my information into Turbo Tax Deluxe it tells me that because I have $0 in earned income, the amount I'm trying to convert will be considered an excess contribution and will be subject to a 6% annual penalty as long as the conversion amount remains in my IRA.  Is that correct (the discussions I've read indicate that a conversion can be done without penalty regardless of income) or should I be reporting the conversion into TT in a different manner?  Thanks for any feedback!

[dmertz]

A Roth conversion is reported by entering a Form 1099-R for the traditional IRA distribution, indicating that you moved the money to another retirement account, that you did a combination of rolling over, converting and cashing out, the indicating the amount that was deposited into the Roth IRA.  it is not entered anywhere under Deductions and Credits.

A Form 1099-R for a distribution from a traditional IRA will have code 7 if you are over age 59½, the IRA/SEP/SIMPLE box marked, the gross distribution amount in boxes 1 and 2a, and box 2b Taxable amount not determined marked.

[NCperson]

first, there is no penalty as long as you are over 59.5 years old....

it is easier to just open up a Form 1099-R and complete the form.  put code 7 in box 7.  put the amount you are thinking about coverting to a Roth in boxes 1 and 2a (the amount should be the same assuming all the money in the IRA is pre-tax, meaning the basis is zero).  The little check box next to Box 7 should be checked that this is an IRA.

does that work?  

[Critter-3]

Basically  a  CONVERSION  should not be reported as a   CONTRIBUTION which is what you did if the program is giving you the  excess contribution message.  Undo that and wait for the 1099-R form to come in the mail next month to properly enter and complete all the questions in that section of the program.  

[Geezrr]

Perfect!  Thaks for your help!

[tim4hawks]

I have received my 1099R, and I converted the entire IRA contribution to a Roth, which I stated in the income section. But when I complete the deductions section for retirement withdrawals, it gives me that same 6% penalty for not having any earned income. 

[dmertz]

Nothing about a Roth conversion is to be entered under Deductions & Credits.

Make sure that you did not mistakenly do or report a recharacterization rather than a Roth conversion.

[tim4hawks]

OK, great, so basically as long as I listed in the wages and income section that I was converting to a Roth, I'm covered, correct? Thanks much for the help!

[dmertz]

Right, just enter the (code 1, 2 or 7) Form 1099-R and indicate the amount converted to Roth.