Question

Form 1099-R - Early Roth IRA Distribution

Accepted Answer

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:

Online

Dashboards

From within your TaxAct return, click Income (on smaller devices, click in the top left corner of your screen, then click Income).
On the Income Dashboard, click Retirement & Social Security, then click Add for Nondeductible IRAs (Form8606).
Continue with the interview process to enter your information.

Classic Navigation

From within your TaxAct return, click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand, then click [Taxpayer/Spouse] Nondeductible IRAs (Form 8606).
Continue with the interview process to enter your information.

Desktop

From within your TaxAct return, click Federal
Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand, then click [Taxpayer/Spouse] Nondeductible IRAs (Form 8606).
Continue with the interview process to enter your 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 webpage or document at the time it is accessed.