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May 18, 2021
Question

I converted 11,000 dollars from IRA account to Roth Account. Does this count as IRA withdrawl eventhough I directly transfer the fund between the two accounts?

  • May 18, 2021
  • 1 reply
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The Turbox tax system shows I need to pay penalty because I access the allowed limit of the IRA withdraw.

1 reply

May 18, 2021

Please make sure you do not enter this as a contribution. Please follow these steps to enter the 1099-R and conversion:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “1099-R”
  3. Click on “Jump to 1099-R”
  4. Click "Continue" and enter the information from your 1099-R
  5. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA
  6. On the "Your 1099-R Entries" screen click "continue"
  7. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
  8. Answer the questions about the basis and value

 

If you did not have a basis (nondeductible contribution) in your traditional IRA , then the whole conversion amount will be included in your taxable income.

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