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To get Line 19 of IRS Form 8606 Nondeductible IRAs to calculate properly, enter the Roth IRA distribution on Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.. In Form 1099-R, select code "J-Early distribution from Roth IRA" in Box 7, check 2b. Taxable amount not determined, and also 2b. Total distribution, if applicable. This will also enable the Roth IRA Contribution screen to appear within the TaxAct program.

The gross distribution amount should then transfer automatically to Form 8606, Line 19. You can then enter the Roth IRA basis directly on Line 22. Only the gain will be taxable and the penalty is figured on the gain only.

To enter or review the Roth IRA basis in contributions:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand, then click Taxpayer/Spouse Nondeductible IRAs (Form 8606) for the taxpayer (or the spouse if any).
  3. Continue with the interview process to enter all of the appropriate information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.

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