Is my ROTH IRA Taxable Income

[taxesohmy2017]

I took a ROTH IRA distribution in 2019. Not sure if portion or all of it taxable income.

I am 43yrs old. I opened my ROTH IRA in 2017.

2017 I contributed to ROTH IRA -  form 5498 shows box 10 - $150.00

2018 I contributed to ROTH IRA - form  5498 shows box 10 - $4,941.00 and box 3 ROTH IRA conversion $5014.45  ALSO took a distribution from ROTH IRA for $3,700.00 

2019 - I did not contribute.  However I did take a distribution in 2019 for $7,973.00,  I received form 1099-R box 1 shows $7,973.00 and box 2 taxable amount shows 0.  Box 7 code J.

How do I calculate my taxable income portion.  Like I mentioned I am 43 yrs old and opened the ROTH IRA 2017.  I am confused what is taxable and what is not.  I know I am under the age of 59 1/2 and I did not hold the account more than 5 yrs. So does that mean my entire distribution is taxable? Also how do I calculate what is taxable if my full amount is not?  Also, I did take a distribution from ROTH back in 2018 for $3700.  I received a 1099-R for that and box 1 showed $3700 and box 2 was left blank with a box 7 code of J. For that year I put the entire $3700 in box 2.  Not sure if it was correct or not. 

Very confused because when I read, your ROTH IRA is tax free regardless of age if you take out just the contributions however then I read that you have to hold the account for more than 5 yrs and be over the age of 59 1/2 yrs old. 

Any help would be greatly appreciate.  Thank you

[macuser_22]

You can always withdraw your own Roth contributions tax and penalty free.   Add up all prior Roth contributions. Subtract any prior distribution. That would be the contributions not previously withdrawn.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

One of the followup questions will ask for your prior year** contributions not previously withdrawn. Those contributions that still remain in the Roth will not be taxed or subject to a early withdrawal penalty. That will add a 8606 form to your tax return with the Roth contribution and tax calculation in part III.

Note: **Prior year - any current year Roth contributions should be entered into the IRA contributions section. They will not show up in the prior years contributions but will be accounted for on the 8606 form that calculates the taxable amount.

[taxesohmy2017]

Just want to make sure I understand this correctly.  

So I add up all my contributions  (contributions were made in 2017 and 2018)

$150+4941=$5091

then I subtract $3700 from my distribution in 2018 leaving me with $1391.00

then I add my ROTH conversion I made in 2018 of $5014.00

so then I add 1391+5014 = 6405

In 2019 I took $7973 I subtract that from $6405 and my taxable income would be $1,568

Is this correct?

Do I calculate 10% penalty since I am under 59 1/2 and did not hold the account more than 5 yrs?

[macuser_22]

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@taxesohmy2017 wrote:

Just want to make sure I understand this correctly.  

So I add up all my contributions  (contributions were made in 2017 and 2018)

$150+4941=$5091

then I subtract $3700 from my distribution in 2018 leaving me with $1391.00

then I add my ROTH conversion I made in 2018 of $5014.00

so then I add 1391+5014 = 6405

In 2019 I took $7973 I subtract that from $6405 and my taxable income would be $1,568

Is this correct?

Do I calculate 10% penalty since I am under 59 1/2 and did not hold the account more than 5 yrs?

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Not exactally.  Do not include conversions when  it asks for prior year contributions.   The next screen will ask about conversions.   The 10% penalty applies if you are under age 59 1/2 and withdrew any earnings or conversions that were not on the Roth for 5 years.    Each conversion has it's own 5 year clock so the interview will ask the year of the conversion.