If I withdrew only my contributions from my roth IRA, why are some of it saying it's retirement income when I added my 1099-R info? None of what I withdrew were earnings.

Forum|Forum|2 years ago
January 12, 2024
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So for example, if I contributed 18k within 5 years to my roth IRA accounts, and I only withdrew 15,900 I should not be having penalties or owe any taxes. How do I tell Turbotax that when I am filing my taxes?

TurboTax Deluxe Online

Best answer by Vanessa A

So I have three Roth IRA accounts, I am still waiting for my last 1099-R from a different financial institution. I currently have two 1099-R forms.

First 1099-R form:

- Box 1 - 9,900

- Box 2b is checked

- Box 5 has nothing

- Box 7 Distribution code is J

Second 1099-R form:

- Box 1 - 3,000

- Box 2b is checked

- Box 5 has nothing

- Box 7 Distribution code is J

Those are the only boxes that are filled out for both 1099-R forms

If you entered everything in your 1099, then continue through until you get to the questions asking if you owned it for 5 or more years, answer and keep going until you get to the question "Enter Prior Year Roth IRA Contributions".

If you had contributions of more than $12,900, TurboTax will remove all the taxes on the Roth. If your contributions prior to 2023 were less than the $12,900 you withdrew, it will have you pay taxes on the excess as it is looking at it as distribution of earnings not just your contributions. Continue through to the end of that section.

Vanessa A

How old are you? If you are under 59 1/2 years old, you would still be liable for an early distribution penalty of 10% unless you meet one of the exceptions for the penalty. As you walk through the interview questions after entering your 1099-R, you will be asked about the exceptions.

If you are over 59 1/2 TurboTax will use your date of birth that you entered in the personal info section and the code in box 2 of your 1099-R to determine that your distribution is not taxable.

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edlenfernAuthor

Is this new for Roth IRAs? I was really under the impression that I can withdraw my contributions regardless of age and I will not be paying any penalties or taxes. Below is what I researched

Roth IRA Contributions: For Roth IRAs, you can withdraw your contributions (the principal amount you deposited) at any time, regardless of your age, without incurring taxes or penalties. This is a key feature of Roth IRAs and differentiates them from Traditional IRAs.
Earnings Withdrawal Rules: The 10% early distribution penalty and potential taxes apply to the earnings (not contributions) withdrawn from a Roth IRA if you are under 59 1/2 years old and do not meet certain exceptions. This penalty does not apply to withdrawn contributions.