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lkwheel
March 9, 2024
Solved

Roth IRA, contributions are treated as taxable

  • March 9, 2024
  • 1 reply
  • 0 views

Couple each opened a Roth IRA, after 2 years husband died, wife had the two IRAs merged.  Their contributions in 2 years were about 14,500.00.  Wife needed to take a total distribution and close the account.  The distribution was about 14,800.   Turbotax is treating the entire amount as taxable.  Yes she was unable to keep the Roth for 5 years, yes she understands their will be a penalty.
Why is TT treating the entire amount as taxable when only 300 is gained interest and the rest was contributions from already taxed money?

    Best answer by dmertz

    Click the Continue button on the page that lists the Forms 1099-R that you have entered.  When TurboTax asks you to enter the amount of your Roth IRA contributions, enter the total contributed by wife and husband.  TurboTax will prepare Form 8606 Part III to determine the taxable amount.  Only the roughly

    $300 of earnings will be subject to tax and penalty.

    1 reply

    D
    dmertzAnswer
    Employee
    March 10, 2024

    Click the Continue button on the page that lists the Forms 1099-R that you have entered.  When TurboTax asks you to enter the amount of your Roth IRA contributions, enter the total contributed by wife and husband.  TurboTax will prepare Form 8606 Part III to determine the taxable amount.  Only the roughly

    $300 of earnings will be subject to tax and penalty.

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