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January 23, 2025
Question

i have a 1099 r why am i paying taxes on money that was already taxed

  • January 23, 2025
  • 2 replies
  • 0 views
put $8000 post tax in an ira rolled over same day to a roth now it says i owe about 2000 dollars on this money

    2 replies

    January 24, 2025

    To begin with, you need to enter a traditional IRA contribution in the Deductions and Credits section of TurboTax, then Retirements and Investments, then Traditional and Roth IRA Contributions. Indicate that your traditional IRA contribution is non-deductible when asked in the program.

     

    When you enter the 1099-R form in TurboTax reporting the rollover, you need to first indicate that you moved the money to another retirement account and that you did a combination of rolling over, converting or cashing out the money. Then, enter the amount converted to a ROTH IRA.

     

    Later on you may need to indicate that you tracked non-deductible contributions to your IRA. One screen will require you to enter the basis (total of non-deductible contributions) in your traditional IRA's at the end of 2023, the other will request the value of all traditional IRA's (not Roth IRA's) at the end of 2024.  Those entries will allow the program to calculate the taxable amount, if any, of your rollover to the ROTH IRA.

     

    [Edited 1/27/25 at 10:50 AM PST]

    @mcgheesj 

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    Employee
    January 24, 2025

    The result implies that either you have not entered the traditional IRA contribution as being nondeductible or you indicated to TurboTax that you had a non-zero year-end balance in traditional IRAs.  With a nonzero year-end balance in traditional IRAs, the taxable amount of your Roth conversion is determined on Form 8606 Parts I and II.  With some amount of your Roth conversion being taxable, some amount of your basis in nondeductible traditional IRA contributions remains with your traditional IRAs.