How do I enter a Roth conversion on Turbotax?

Asked by: Daron Ryan  |  Last update: February 9, 2022
Score: 4.9/5 (43 votes)

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?
  1. log in to your Turbo Tax account.
  2. click on "take me to my return"
  3. click on the "federal taxes" tab.
  4. click on "wages and income"
  5. choose "show more and "see list of all income"

How do I report a Roth conversion on my taxes?

You'll receive a Form 1099-R from your financial institution reporting the Roth conversion. It will be coded as a rollover to a Roth IRA. You'll use the information from that form to report your Roth conversion income on Form 8606 with the taxable portion of the conversion income reported on your Form 1040.

How do I enter backdoor Roth conversion in Turbotax?

Go to Federal Taxes -> Wages & Income -> IRA, 401(k), Pension Plan Withdrawals (1099-R). As you work through the interview, you will eventually come to the point to enter the 1099-R. Select Yes, you have this type of income. Import the 1099-R if you'd like.

How do I enter a backdoor Roth IRA conversion?

How to create a backdoor Roth IRA
  1. Put money in a traditional IRA account. You might already have an account, or you might need to open one and fund it. ...
  2. Convert your contribution to a Roth IRA. ...
  3. Prepare to pay taxes. ...
  4. Prepare to pay taxes on the gains in your traditional IRA.

How do I complete a Roth conversion?

How do you convert to a Roth IRA?
  1. Open a Roth IRA account. You'll need to open a Roth IRA account at a financial institution. ...
  2. Contact your plan administrators. Reach out to both the new and old financial institutions to see what they need to make the conversion to the new account. ...
  3. Submit the required paperwork.

Using TurboTax (2020) For Roth Conversions

23 related questions found

Do Roth conversions count as income?

The amount you convert from a traditional IRA to a Roth IRA is treated as income—just like all taxable distributions from pretax qualified accounts. Therefore the conversion amount is part of your MAGI, and it may move you above the surtax thresholds.

When should I do a Roth conversion?

First, the best time to do a Roth conversion is in a lower-income year. If you earn less money than you usually do in any given year, you'll fall into a lower tax bracket. While you'll earn less money overall, this can be an opportunity to convert pre-tax assets to Roth status.

How do I report a traditional IRA to a Roth IRA conversion in TurboTax?

To report the Traditional IRA distribution and the conversion contribution:
  1. log in to your Turbo Tax account.
  2. click on "take me to my return"
  3. click on the "federal taxes" tab.
  4. click on "wages and income"
  5. choose "show more and "see list of all income"
  6. scroll down to "retirement plans and social security"

Does TurboTax support backdoor Roth?

Reporting the Backdoor Roth IRA properly on Turbotax is unfortunately even more complicated than filling out Form 8606 by hand. The key to doing it right is to recognize that you report the conversion step in the Income section but your report the contribution step in the Deductions and Credits section.

What is the distribution code for a Roth conversion?

For a Roth conversion, the 1099-R usually has a Distribution Code 2 in Box 7. That means it is an early distribution but an exception applies so there is no penalty. To check that the right results show, look at your 1040 form.

How do I report backdoor Roth on 1040?

Form 8606 Line 18 should be reported on Line 4b of Form 1040 for a 2018 Backdoor Roth IRA.

Does TurboTax have Form 8606?

To trigger the 8606 in TurboTax

Inside TurboTax, search for this exact phrase, including the comma: 8606, nondeductible ira contributions. Select the Jump to link in the search results. Proceed through the IRA section, answering questions as you go.

Do I need to file 8606 for Roth?

You don't have to file Form 8606 solely to report regular contributions to Roth IRAs.

How do I enter an IRA rollover in TurboTax?

Click on Jump to 1099-r. At the choose your bank or brokerage screen, click on I'll type it in myself. Enter your 1099-R form exactly as shown. If the form has Box 7 with code G, Rollover, TurboTax will automatically enter it as a Rollover on your income tax form.

How do I report an IRA contribution to TurboTax?

To enter your traditional IRA contribution:
  1. On the left side of your screen, click Federal.
  2. At the top of your screen choose Deductions and Credits.
  3. Scroll down to Retirement and Investments.
  4. Click Start on Traditional and Roth IRA Contributions.

Are all Roth conversions going away?

Starting in 2022, the bill had proposed to end so-called non-deductible backdoor and mega backdoor Roth conversions. Regardless of income level, you'd no longer be able to convert after-tax contributions made to a 401(k) or a traditional IRA to a Roth IRA.

What is the deadline for a Roth conversion for 2020?

Yes, the deadline is December 31 of the current year. A conversion of after-tax amounts is not included in gross income.

How do I convert my IRA to a Roth without paying taxes?

If you want to do a Roth IRA conversion without losing money to income taxes, you should first try to do it by rolling your existing IRA accounts into your employer 401(k) plan, then converting non-deductible IRA contributions going forward.

Why you should not convert to a Roth IRA?

If you're approaching retirement or need your IRA money to live on, it's unwise to convert to a Roth. Because you are paying taxes on your funds, converting to a Roth costs money. It takes a certain number of years before the money you pay upfront is justified by the tax savings.

How do I avoid underpayment penalty on Roth conversion?

Payroll Withholding.

Paying the conversion tax with withholdings is the surest way of paying the full tax and avoiding any underpayment fees and penalties.

Should I do a backdoor Roth conversion?

Backdoor Roth IRAs are worth considering for your retirement savings, especially if you are a high income earner. A Backdoor Roth conversion can be something to consider if: You've already maxed out other retirement savings options. Are willing to leave the money in the Roth for at least five years (ideally longer!)

How do I add 8606 to TurboTax?

How do I fill out form 8606 in Turbo-Tax?
  1. Sign into your account and select your current return.
  2. Select Tax Tools and then Tools (see attached tax tools)
  3. Select Topic Search (see attached image)
  4. Search for 8606 and select go.

What happens if you don't file form 8606?

An individual who fails to file Form 8606 to report a non-deductible contribution will owe the IRS a $50 penalty. Additionally, if the non-deductible contribution amount is overstated on the form, a penalty of $100 will apply.