In turbo tax where do I find the higher education exemption on roth contributions so no taxes are owed?

Forum|Forum|1 year ago
March 1, 2025
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Turbo tax is flagging zero tax taken out but I used this roth for college. I can't find where to select exemption

SabrinaD2

If your Roth IRA meets the 5-year rule* and the withdrawal was used for qualified education expenses, you shouldn't owe any additional taxes or penalties. Here's how to handle this in TurboTax:

Sign into TurboTax for link in step 2 to work
Click on 1099-R."
Continue Through the Questions: After entering your 1099-R information, continue through the questions until you reach the screen that asks, "Did you use your IRA to pay for any of these expenses?"
Select Higher Education: On this screen, you can enter the amount of your distribution used for higher education expenses. This will help TurboTax apply the exemption for the 10% early withdrawal penalty.

*If your Roth IRA has been open for at least five years and the withdrawal was used for qualified education expenses, TurboTax should show zero penalties and no additional taxes. However, if you haven't met the 5-year rule, you may have to pay taxes on the earnings, but you can still be exempt from the 10% penalty for early withdrawal.

For more details on the 5-year rule, you can check out this Fidelity article

sseger03Author

I went through these steps --After entering your 1099-R information, continue through the questions until you reach the screen that asks, "Did you use your IRA to pay for any of these expenses?" Select Higher Education: On this screen, you can enter the amount of your distribution used for higher education expenses.

There is no question that asks about applying IRA to higher education. When I search this on Turbo Tax nothing comes up?

AnnetteB6

That question will only come up if you are being penalized with the 10% early distribution penalty.

The screen asking about whether the distribution was used to pay higher education expense will only apply to excluding the early distribution penalty, not any income tax that may apply to your distribution.

Check your Form 1040 line 4b to see if any of the distribution is being taxed as income.

To preview your Form 1040 using TurboTax Online, use the following steps while working in your tax return:

In the navigation area on the left side of your screen, click Tax Tools to expand your choices
Click Tools, which will open the Tool Center
Click View Tax Summary under “Other Helpful Links…”
Click Preview My 1040 on the left side of your screen to see your actual tax form

If you are using one of the desktop versions of TurboTax, click the Forms button in the upper right corner of the screen to go to Forms Mode where you can view Form 1040 or any other form that is included as part of your return. Once you are in Forms Mode, click the form name in the list on the left side of the screen.

@sseger03

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