I am going to do a Roth IRA Conversion this year (2021) where I rolled from a traditional IRA that was funded from taxed dollars several years ago. So when I convert, most of the $ should not be taxed since the bulk of the money has been taxed. There will be a small amount of investment profit. My question is how do I enter into Turbotax showing the amount correctly so it will not calculate as all needing to be taxed.
Thanks in advance.
You will receive a Form 1099-R reporting the distribution from your Traditional IRA. After you enter the Form 1099-R, there will be follow-up questions to answer that will indicate that the distribution was rolled over to a Roth IRA.
Then, after you have finished entering any other Form 1099-R that you may have received, there will be yet other follow-up questions to answer. One of these will ask if you made non-deductible contributions to your Traditional IRA. You can answer 'yes' and enter the basis of your Traditional IRA account(s). This will allow TurboTax to calculate what portion of the rolled-over distribution will be taxable. So, be sure to have the non-deductible contribution amounts handy when you are working on your return for 2021.