Roth IRA contributions

[esmeralda204]

I've had a Roth IRA since about 2000. I always report my annual contributions, which I understand the IRS needs so they know how to tax when I begin to take distributions. Recently I've downloaded 1099 forms from my broker to report. Some years I get a credit or deduction for my contribution, and I just accept whatever the online system gives me. Do regulations change from year to year? What is allowed?

[Critter-3]

 ROTH contributions  are  NEVER dedictible on the tax return  and entering the contributions in the program is not sent to the IRS thru the tax return ... that info is sent via the form 5498 issued by the IRA custodian.  The reason to enter it in the TT program is so that the program keeps track of the contribution  AND  to calculate any possible Saver's Credit form 8880 ... so is that what you are referring to changing each year ? 

[dmertz]

... and, since 2022 when the tax credit mentioned by Critter-3 became available, nothing has changed with regard to how Roth IRA contributions are handled (other than contribution limits).

Once you are over age 59½ and because it has been more than 5 years since your first Roth IRA contribution, your Roth IRAs will be qualified and you won't need to use Form 8606 to report distributions because the distributions will be entirely free of tax and penalty.

[Opus 17]

1099-R only reports withdrawals.  Contributions are reported on form 5498.  You need to know the total of your contributions from your own accurate records.  If you list Roth contributions in TurboTax, the program is supposed to help you keep track, but it doesn’t get reported on your tax return unless you are a low income and qualify for the retirement savers credit.  But that still doesn’t track your whole total contributions.  

You would only need to know your contributions if you make withdrawals before age 59-1/2. If you wait until after, all your withdrawals are tax free no matter if they are earnings or contributions.  

[VolvoGirl]

I'm concerned you said you might have gotten a deduction for a contribution.  A ROTH IRA is not deductible.  So better checks all your returns and make sure you didn't get a IRA deduction.  

[Hal_Al]

Q. Some years I get a credit or deduction for my contribution, and I just accept whatever the online system gives me. Do regulations change from year to year? What is allowed?

A.  The Retirement Savings Contributions Credit (“Saver’s credit”) is very limited and is generally for low income people. It would not be unusual for you to qualify some years and not qualify in other years. 

See the table on  Form 8880: https://www.irs.gov/pub/irs-pdf/f8880.pdf

To qualify, you, or your spouse, must  not have taken money out of a retirement account (including drawing a pension) in the last three years. See line 2 on form 8880. Full time students are not eligible. 

Q.  I always report my annual contributions, which I understand the IRS needs so they know how to tax when I begin to take distributions. Right?

A. Even though you enter your Roth contribution, in TurboTax (TT), it is not reported to the IRS (unless you claim the saver's credit).  Your IRA custodian reports your contribution, to the IRS. on for 5498 (which you get a copy of). You need to keep track of your contributions. TT will prepare a worksheet (that is not sent to the IRS) that helps you keep track of your contributions.  If you only take qualified distributions, in the future, then you will not need that info.