Why is 1099R from a Roth being tax?

Forum|Forum|3 years ago
April 2, 2023
2 replies
15 views

the 1099R has box 1 with an amount and box 2 blank box 7 J

Intuit Tax Advisor

This topic has been closed for replies.

qbteachmt

Level 15

The issuer doesn't necessarily know anything about the taxpayer or what they had before using this provider, nor what happened to the funds distributed. The taxpayer knows, and the tax preparer indicates in the worksheet, what really happened and how it meets requirements.

Code J indicates that there was an early distribution from a ROTH IRA. The amount may or may not be taxable depending on the amount distributed and the taxpayer's basis in ROTH IRA Contributions.

So, have you done your evaluation? What did the taxpayer tell you? For instance, there are a number of 5-year rules, there is a taxpayer age rule, you separate their contribution amounts from conversions, rollovers and growth. One account can hold all of these, so you have to do some math. And how old is your taxpayer?

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T

TaxGuyBill

Level 15

You need to tell the software how much "Basis" your taxpayer had in Roths.

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