Need help on how to report my early withdrawal

FreeTaxUser0319
FreeTaxUser0319 Member Posts: 3 Newcomer
in Retirement Income

Hello

I need help on how to report this please.

I previously had around $1120 in funds sitting in a Roth IRA account. My first contribution was in 2020.

Before I did a withdrawal on this account, I did something separate.

In June 2025, I converted roughly $1579 from a former 403b plan (that was after tax) and transferred it to the same Roth IRA account.

I then withdrew the total amount of the Roth IRA that same time. It amounted to roughly $2859 directly to my bank.

I am trying to figure out how to report it in the software because I get stuck in the Roth basis contributions and Roth basis conversions.

Pls advise, ty!

Best Answer

  • Taylor
    Taylor FreeTaxUSA Agent Posts: 71 image
    Answer ✓
    Hello FreeTaxUser0319,

    For the 1099-R direct rollover, the distribution code will indicate this in the software and you will not need to indicate in later screens that it is a rollover.

    The Form 1099-R for with the early withdrawal, after you enter the 1099-R form, continue through the screens, you'll reach questions about your Roth IRA basis:

    Roth Basis in Contributions: This is the total amount you've contributed directly to your Roth IRA over the years. The only thing that is taxable and subject to the 10% penalty are the earnings from your Roth IRA account. The amounts entered for the Roth IRA basis and conversion basis will reduce the taxable amount. If the basis is more than the Roth distribution then none of it will be taxable or subject to the 10% penalty.

    Please reach out to our Customer Support team inside your account so they can look at the entries with you.

Answers

  • FreeTaxUser0319
    FreeTaxUser0319 Member Posts: 3 Newcomer

    Sorry. I'm now learning that it wasn't a conversion. It's a rollover of part of my funds from my 403b to Roth IRA.

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 901 image
    Hello,

    You should have received two 1099-R forms. One for the rollover and one for the distribution.

    For the rollover from the 403b to the Roth, what was the code in box 7? Was it code G, a direct rollover to a qualified plan? If so, then that takes care of that.

    The 2nd 1099-R will be for an early withdrawal. You should only be taxed on the gain. After you enter the 1099-R, enter your basis (contribution) for the Roth. Otherwise, you will be taxed on the full amount.

    You may want to contact Customer Support to ask any additional questions and so someone can look over your entries.
  • FreeTaxUser0319
    FreeTaxUser0319 Member Posts: 3 Newcomer

    Hi Matthew,

    My apologies for the delay in responding.

    On my 1099R from 4O3b to the Roth, the distribution code is H. Which says its a direct rollover of a Roth distribution to Roth IRA. That amount was 1.579.30

    I have a 1099R from Fidelity about my early withdrawal with distribution code J. That amount was 2,859.79.

    There is a difference because I already had existing funds since 2020 in my Roth IRA account. So how do I calculate the distribution?

    Thank you!

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