how to enter a Roth conversion that came indirectly from a 403(b)

Forum|Forum|1 year ago
April 28, 2025
1 reply
10 views

I have a client who took a 403(b) distribution for $90,000 in a check. He then put it in a timely way into a Roth.

How do I fill out what happened so that a Roth conversion can be recognized? I had thought it should be taxed on line 5 of the 1040 and show up on an 8606 p2 on lines 16 and 18. Colleagues says that because it's not an IRA, it shouldn't be on the 8606.

How would you do it? Thanks for your thoughts.

Lacerte Tax

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qbteachmt

Level 15

There wasn't a rollover Trad IRA where the money was parked, first, so it isn't:

403(b) ==> Rollover IRA ==> Converted to Roth IRA

The taxpayer will get a 1099-R. You enter this into the worksheet. Here are some Lacerte help articles:

https://accountants.intuit.com/support/en-us/help-article/form-1099-r/common-questions-form-1099-r-lacerte/L15JViCfv_US_en_US?srsltid=AfmBOoqBNrDjJ0WWZn5euH8vsCcDHza5hcW9JiMeS-1Q3vtEiRc-KAGU&uid=ma1fedpt

https://accountants.intuit.com/support/en-us/help-article/insurance-medical-benefits/understanding-form-1099-r-distribution-codes/L6HVZf9vT_US_en_US?srsltid=AfmBOopV2RnxxUZU_Qqwwh2R-pdK-5EcG9_JodnlxMFumtomiGWkfDrA&uid=ma1fj2rs

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N

NYtaxwomanAuthor

Level 2

No, the client did this on his own. Had he run it through an IRA, then it wouldn't have created my issue.

Thanks for the references. Maybe I'm not reading properly. But aside from entering the pension as taxable on the 1040 pension line, is there anything else that must be filed to show it's a Roth conversion?

Thanks.

Accountant-Man

Level 13

Don't forget state treatment, which might be different.

In NJ, the 403b contributions were taxed as wages, so any distribution might only be partially taxable to NJ. How much of the $90k was earnings? The rest would NOT be taxable to NJ.

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