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How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

Forum|Forum|6 years ago
June 4, 2019
8 replies
0 views

turbotax online version not showing the Forms (1040/8606/540x) to enter the details directly.
Got below message:
Income Too High To Deduct an IRA Contribution

Ashok's modified adjusted gross income (MAGI) is $x,
which puts Ashok over the limit for IRA deductions. To deduct a contribution, you can't have a MAGI of over $x while being covered by a retirement plan at work.

TurboTax Deluxe Online

Best answer by AndreaG

To report the Traditional IRA distribution and the conversion contribution:

log in to your Turbo Tax account
click on "take me to my return"
click on the "federal taxes" tab
click on "wages and income"
choose "show more and "see list of all income"
scroll down to "retirement plans and social security"
click on "start" next to "IRAs, 401(k), etc"
enter the information for your 1099R
Turbo Tax will ask you questions about your Traditional IRA distribution
When you reach the screen that says, "what did you do with the money?", choose the option that says, "I moved the money to another retirement account"
After you choose this option, another set of options will appear:
If you converted the entire distribution to a Roth IRA, choose "I converted all of this money to a Roth IRA"
If you only converted some of the distribution to a Roth IRA, choose, "I did a combination of rolling over, converting, and cashing out the money." If you choose this option, Turbo Tax will ask you to identify how much of the distribution was converted to a Roth IRA, and how much of the distribution was rolled over into another retirement plan.
Next you will the screen that says, "your 1099R entries". Scroll down to the bottom of the page and click "continue". Turbo Tax will ask you more questions and you will need your 5498 Form for your Traditional IRA. A year end statement might also provide the necessary information.

AndreaGAnswer

Employee

To report the Traditional IRA distribution and the conversion contribution:

log in to your Turbo Tax account
click on "take me to my return"
click on the "federal taxes" tab
click on "wages and income"
choose "show more and "see list of all income"
scroll down to "retirement plans and social security"
click on "start" next to "IRAs, 401(k), etc"
enter the information for your 1099R
Turbo Tax will ask you questions about your Traditional IRA distribution
When you reach the screen that says, "what did you do with the money?", choose the option that says, "I moved the money to another retirement account"
After you choose this option, another set of options will appear:
If you converted the entire distribution to a Roth IRA, choose "I converted all of this money to a Roth IRA"
If you only converted some of the distribution to a Roth IRA, choose, "I did a combination of rolling over, converting, and cashing out the money." If you choose this option, Turbo Tax will ask you to identify how much of the distribution was converted to a Roth IRA, and how much of the distribution was rolled over into another retirement plan.
Next you will the screen that says, "your 1099R entries". Scroll down to the bottom of the page and click "continue". Turbo Tax will ask you more questions and you will need your 5498 Form for your Traditional IRA. A year end statement might also provide the necessary information.

jogmol47

After entering my IRA distribution and checking that I rolled the money to another account, I did not get the option to check that the money went into a Roth. Help!!

macuser_22

Employee

@jogmol47 wrote:

After entering my IRA distribution and checking that I rolled the money to another account, I did not get the option to check that the money went into a Roth. Help!!

The questions are slightly different if you are using the online of desktop version. Either way you indicate that you did a combination of things and enter the amount converted to the Roth in the bottom box.

**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.**

bartzumbari

I'm using Turbotax Premier and I converted my IRA to a Roth--I do this every year. I put money in an IRA. Then immediately convert it to a Roth IRA. So there's no taxable income. Everything is going fine, turbo tax even says I won't have to pay taxes on this distribution. But my Federal tax due reflects a payment due. I feel this must be a bug in Turbo tax this year (I've never had this problem before). Any clues?

reenu

How is there no taxable income? Any conversion will result in taxable income.

DaveF1006

Yes this should be a taxable event. Let's try these steps to see if you reported correctly.

You have entered your 1099R. make sure there is a taxable amount listed in Box 2A
Make sure the IRA box is checked between Box 7 and 8 in your form
Answer the question on the next screen and continue
the 4th question should ask Let us know about the distribution. Select Traditional IRA
Then move through the next question about inheriting and then the next screen will ask, what you did with the money.
Indicate you rolled it over into another retirement account
Then another drop down will appear. Here you will say you converted to a Roth
Finish up the questions. That distribution should now as taxable on 1040-4B

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KrisD15

Is this the only transaction you reported? No wages or other income?

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Arsenyc

I'm having the same issue. I fill in all the right boxes, check all the conversion questions, yet my 8606 still comes out wrong. line 4 is blank, no matter what I do. This is definitely a bug in the system!

ashleyblewis

The above steps fixed the issue for me. I hadn't yet added the contribution, only the distribution/conversion. Hope that helps you as well!

dmertz

Employee

If line 4 of Form 8606 is blank, it means that when entering your 2019 traditional IRA contribution you did not indicate the amount that was contributed in 2020, or you mistakenly indicated that you recharacterized the traditional IRA contribution to be a Roth IRA contribution instead. A Roth conversion is not a recharacterization.

bitbyaseagull

What if you don’t have a 1099-R? I just did the conversion (a same trustee transfer) on July 13, 2020. My financial institution says it will not issue a 1099 until next year. If possible, I’d like to pay the tax as part of my 2109 taxes, though.

dmertz

Employee

A Roth conversion is reportable on the tax return of the year in which the Roth conversion was performed. For a Roth conversion performed in 2020, you'll get the Form 1099-R near the end of January 2021 and you'll report it on your 2020 tax return. This Roth conversion does not get reported on your 2019 tax return; it is not permitted to be treated as 2019 income.

jns001

@macuser_22
@dmertz

@ashleyblewis

sorry if posting twice, can’t find my orig post.

I completed Roth conversion in 2021 for 2020 contribution. I have learned from your posts that I can’t report the conversion until 2021 tax forms.

Can someone tell me how to report my IRA contribution for 2020 using TurboTax? (I contributed 6000 to non deductible IRA and converted 100% to Roth in 2021-but meant it for 2020 contribution).

And, I plan to do Roth conversion for 2021 in 2021 (I learned my lesson!). How will I report that next year?

jns001

I made a mistake, I made a non deductible Trad IRA contrib and Roth conversion for 2020 in 2021. I understand I need to file that contribution on 2020 tax form and conversion on 2021 tax form when 1099-R will be issued.

Can someone tell me HOW I claim the IRA contribution for 2020 using TurboTax? I reviewed my 8606 and it states 6000 is taxable (maybe bc I can’t show the conversion til next year?). And will TurboTax automatically carry over for next year when I can report the conversion?

Thanks in advance.

@dmertz

@ashleyblewis

tstanek

Hi,

I had a phone conversation with Turbo Tax tonight (02/22/21). I need to do a manual over ride to show a conversion from an IRA to a Roth IRA. They will let me know when it is fixed.

macuser_22

Employee

@tstanek wrote:

Hi,

I had a phone conversation with Turbo Tax tonight (02/22/21). I need to do a manual over ride to show a conversion from an IRA to a Roth IRA. They will let me know when it is fixed.

Override what? For what purpose? The Roth conversion in TurboTax works fine and does not need any override.

**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.**

tstanek

You are correct. An Agent told me last week that an update would fix it. It updated on 02/26/21, and I was able to do a back door to my Roth IRA then. It was taxed at 6%, but before the update on 02/26/21, it showed I would be paying a 6% penalty as it was treated as a regular cash deposit into my Roth IRA hence the 6% penalty. Now after the update Form 5329 also shows a tax of 6%. My taxable income for 2020 is zero, so the 6% tax rate on Form 5329 is the only tax I will owe for 2020. I assume the 6% is one and done and not a 6% penalty for my Roth contribution? I called Turbo Tax today, and talked to Barbara. She put put me on hold to link me to a CPA, but when she did the transfer, I received a message their was a waiting time again. So I effectively was back to square one. I called Turbo Tax back to get in line.

One more item. I have Form 8606 filled out yearly for a non deductible IRA I did years ago. It did not fill out this year for 2020. I researched and found out an update was supposed to occur by 02/12/21 for it, but it hasn't been updated as yet. What a mess.