Question

How does the taxable amount of my Traditional and Roth IRAs get computed?

Forum|Forum|7 years ago
June 3, 2019
6 replies
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TurboTax Deluxe Online

Employee

What specifically are you asking about?

Unless you have a non-deductible basis in a Traditional IRA, distributions are generally all taxable.

Roth distributions that exceed prior contribution will be taxable if not qualified distributions.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

M

mickeyhostickAuthor

TurboTax shows my total and the portion that is taxable. But the taxable amount is less than half the total amount. The Roth amount accounts for only about a third of that reduction. I cannot figure where they get the other two-thirds of the difference between the actual total and the taxable amounts. Thanks

macuser_22

Employee

If you have non-deductible Tradition IRA contribution then the taxable amount is calculated on a 8606 form.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

M

mickeyhostickAuthor

The deductible Traditional IRA contribution distribution would then be the same as the taxable amount.

macuser_22

Employee

If you had no non-deductible contributions then, yes, it would all be taxable.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

macuser_22

Employee

You can always withdraw your own Roth contributions tax and penalty free.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

One of the followup questions will ask for your prior year** contributions not previously withdrawn. Those contributions that still remain in the Roth will not be taxed or subject to a early withdrawal penalty. That will add a 8606 form to your tax return with the Roth contribution and tax calculation in part III.

Note: **Prior year - any 2018 Roth contributions should be entered into the IRA contributions section. They will not show up in the prior years contributions but will be accounted for on the 8606 form that calculates the taxable amount.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**