When you put money into a traditional IRA as a deductible contribution, it will be taxable when you take it out, even if you are just rolling it over to a ROTH IRA. You have two options to prevent it from being taxed on your return.
The first is to deduct the contribution, then the taxable distribution will be offset by the deduction. The other is to make the contribution non-deductible, then the distribution will not be taxable.
In TurboTax, you need to first enter the contribution and then the distribution, as reported on your form 1099-R. When you do so, make sure you answer the questions accurately with respect to fund balances at the beginning and end of the year, as well as whether the contribution is non-deductible and whether the distribution is rolled over.
TurboTax will reflect the distribution as not being taxable if everything is entered correctly.
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