Traditional to Roth IRA conversion
This year I converted a traditional IRA to a Roth IRA so I will need to pay taxes on that amount. Which form will I expect to receive and does your software support the use of that form? I am hoping I can use FreeTaxUSA rather than paying an individual to prepare my 2024 tax return. Thank you!
Best Answer
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You'll receive a 1099-R and box 7 will specifiy the distribution code (likely 2 from what you described). FTUSA accepts this form.
Answers
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If you are over age 59 1/2 the code in box 7 will likely be a 7, right?
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I am only 42
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Thank you so much!
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trust IRA and inherited IRA
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Hello!
Thank you for attending our live event!
Yes, FreeTaxUSA does support this situation as well as the forms you will receive. Please be aware that you can have your plan administrator withhold taxes to cover the amount of increased tax liability since the conversion is considered taxable unless your Traditional IRA contributions were nondeductible.
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Thank you for your reply! Can you explain just a bit more on your comment about the plan administrator withholding taxes to cover the amount of the increased tax liability? My thought is I would be paying this when I filed my taxes for 2024 therefore resulting in needing to pay additional tax rather than get a refund as usual.
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If you do have your taxes withheld by the plan administrator, it just means that you would be paying the taxes with the conversion verses paying them when you file. To pay when you file is acceptable as well. Either way the extra tax would be paid, but it would just change when it is paid.
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Thank you so much! This was very helpful today! Thank you for offering this.
