Below, please find the procedure for entering the basis of your nonqualified Roth IRA distributions. To get Line 19 of Form 8606 to calculate properly, follow the instructions below:
To enter Form 1099-R (Distributions from Retirement Plans) into the program:
- From within your TaxAct return (Online or Desktop), click on the Federal tab. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
- Click Retirement Plan Income to expand the section and then click IRA, 401(k), and Pension Plan Distributions (Form 1099-R)
- Click Add to create a new copy of the form or click Review to review a form already created
- The program will proceed with the interview questions for you to enter or review the appropriate information
After you enter the distribution amount, make sure the Taxable Amount Not Determined box is checked. Also, the correct codes need to be entered for the screen titled Roth IRA Distributions - Basis to appear. For example, if the Box 7, Code J-Roth Early Distribution is entered, the screen will appear.
- Once you are brought back to the Form 1099-R Summary screen, continue to the screen titled Roth IRA Distributions - Basis.
- In the box for Basis in Roth IRA Contributions, enter the amount of your Roth IRA contributions made in previous years.
Line 15b of your Federal Form 1040 should now have the correct amount as taxable.