To be sure that the distributions are treated properly, you need to enter the basis for the Roth accounts. There are a couple of ways to accomplish entering the basis.
As you enter the 1099-R into your tax return there will be
follow-up questions that you will answer to determine how much of the
distribution will be taxable, if any. One of the questions will ask about
the contributions that were made to the Roth account, which is the basis of the
account. The basis is then used to calculate the taxable portion of your
distribution.
The key is to be sure to Continue through all the
follow-up questions until you are back at the main income screen. If you
are entering more than one Form 1099-R, you may not see the question regarding
the basis until you Continue forward from the summary page showing all
the 1099-R entries.
If you did not see the questions about the Roth basis as you entered the Form
1099-R, an additional way to enter the basis of your Roth IRA is this.
- On the
top row of the TurboTax online screen, click on Search (or for
CD/downloaded TurboTax locate the search box in the upper right corner)
- This
opens a box where you can type in “Roth ira” (be sure to enter
exactly as shown here) and click the magnifying glass (or for
CD/downloaded TurboTax, click Find)
- The
search results will give you an option to “Jump to Roth ira”
- Click
on the blue “Jump to Roth ira” link
This will bring you to a screen with check boxes to indicate
what types of account you had in 2017. Be sure that Roth IRA is
checked. Click Continue.
If Traditional IRA is checked or if you have a spouse that
had either type of account, the next questions will not pertain to your Roth
IRA. Continue through this section until you are asked whether you made
any contributions to your Roth IRA for 2017. This is the beginning
of the section where you will enter details about your Roth IRA, including the
basis.
Continue answering the questions according to your
situation. On the screen where you see Let Us Track Your Roth IRA
Basis, click Yes.
Then, on the screen titled Enter Prior Year Roth IRA
Contributions, this is asking for your total contributions for years prior
to 2017 (basis). If your basis exceeds your distribution, then the
distribution will not be taxable.
Finish the rest of the follow-up questions about your Roth
IRA.
