steps for converting traditional ira balance to roth ira 2023

[carver1]

Do I need to go out of Turbotax to get a clear explanation on how to do something? Like many others I am very frustrated with Turbotax when trying to reflect a two step process (involving two 1099Rs) for moving money out of my 401K, into an traditional IRA, and then into a Roth IRA, while ensuring that I get it reflected in income, etc.

Step 1: I made a "direct rollover" of a set amount from my traditional 401K to a traditional IRA account (so I have a 1099R from my 401K). No taxes were withheld or calculated.

Step 2: I then "converted"  the traditional IRA to a Roth IRA (received a 1099R from my broker) Again, no taxes were withheld or calculated. Unfortunately the traditional IRA earned money, so a small balance remained in the traditional IRA account as of Dec 31, 2023.

Question:  Where and what are the steps for reflecting this in TurboTax 2023?

[VolvoGirl]

You just enter both 1099Rs.  After you enter it then it will ask what you did with it.  The direct transfer from the 401K should be code G in box 7.  That's all that one needs.  Code G is Direct rollover.  It will show up on the 1040 line 5a and line 5b will be zero and say Rollover by it.  

Then the Traditional IRA to ROTH will be on 1040 line 4.  It will all be taxable on line 4b.  Just answer the questions.  It will ask what you did with it.  Oh be sure the little IRA box between boxes 7&8 is checked.  Seems wrong they didn't take taxes out of it.  

[VolvoGirl]

I see @dmertz is around.  He can add more info.

[dmertz]

When entering the code-G Form 1099-R, make sure to indicate that this distribution from the 401(k) was not rolled over to any kind of Roth account.  TurboTax will then treat it as a rollover to a traditional IRA.

After entering the Form 1099-R for the distribution from the traditional IRA and indicating the amount converted  to Roth, be sure to click the Continue button the the page that lists the Forms 1099-R that you have entered and answer any additional questions posed by TurboTax.