nav[aria-label="Primary Navigation"] { padding: 0; & ul { list-style: none; width: 100%; display: flex; flex-direction: row; justify-content: start; align-items: start; gap: 30px; padding: 0; & li { margin: 0; } & ul li { list-style: none; } } }

Calculating Roth IRA basis for filing 2024 taxes

wizfan

Hi, I've made contributions to a Roth IRA I opened in 2020 as follows:

2020	$6,000.00
2021	$6,000.00
2022	$6,000.00
2023	$6,000.00
2024	$3,000.00

This totals to $27,000. In 2024, I took a distribution from my Roth IRA in 2024 of $26,750.41. Would my Roth basis be $27,000 or $24,000?

Find more posts tagged with

Roth IRA

Roth IRA basis

Comments

Henry

Hi wizfan,

It sounds like you took an early distribution from your Roth IRA. Is that correct? If so, your 2024 contributions typically will not be taken into consideration when determining how much of the distribution is taxable/a return of basis.

In the software, you will enter your basis from prior year contributions on the 1099-R screens. Once you have entered the 1099-R for the distribution, one of the subsequent screens will prompt you to enter your basis in Roth IRA contributions. This refers to contributions you made prior to 2024, so you can account for the $24,000 there.

Your 2024 contributions of $3,000 should be reported by going to Deductions/Credits > Common Deductions/Credits > IRA Contributions.

This means $26,750 (Roth distribution) - $24,000 (prior year basis) = $2,750 taxable amount of the distribution included on line 4b of Form 1040. An additional 10% tax will also typically apply to the $2,750 due to the early distribution.

You should have a remaining basis of $3,000 in the Roth account.

wizfan

https://community.freetaxusa.com/discussion/comment/5537#Comment_5537

Thank you for the reply! This question has been bugging me the last few days. Yes, I took an early distribution in 2024. With a basis of $3,000 left, if I were to take another distribution in 2025 (tough times right now unfortunately), could I take up to $3,000 without being taxed?

CoryF

Hello

Yes, since you still had basis of $3,000 in your Roth IRA from the 2024 contributions, your $3,000 distribution in 2025 would not be taxed.