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Do I need to pay taxes on an inherited Roth IRA?

Forum|Forum|3 years ago
February 1, 2023
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Hi all,

I inherited a Roth IRA last year (Feb. 2022) after my father passed away and I'm wonder if I have to pay any taxes on it. I know you have to pay taxes when you put money into a Roth IRA but I'm not sure what happens when you inherit one. So, my questions are:

1) Is there any sort of inheritance tax (or other tax) I need to pay?

2) If I do need to pay taxes on it, how do I report it in turbo tax?

Thank you in advance for any help.

Best answer by MinhT1

1. You do not pay tax on inheritance. So there is no tax due when you inherit a Roth IRA account.

2. Withdrawals of contributions from an inherited Roth are tax free. Most withdrawals of earnings from an inherited Roth IRA account are also tax-free. However, withdrawals of earnings may be subject to income tax if the Roth account is less than 5-years old at the time of the withdrawal.

Please read this IRS document for more information.

M

MinhT1Answer

1. You do not pay tax on inheritance. So there is no tax due when you inherit a Roth IRA account.

2. Withdrawals of contributions from an inherited Roth are tax free. Most withdrawals of earnings from an inherited Roth IRA account are also tax-free. However, withdrawals of earnings may be subject to income tax if the Roth account is less than 5-years old at the time of the withdrawal.

Please read this IRS document for more information.

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