How to Report a Roth IRA Conversion

How you report your Roth IRA conversion depends on whether you converted the money from a pretax IRA such as a traditional IRA or an employer plan such as a 401(k) or 403(b). At the end of the year, you'll receive an IRS Form 1099-R that shows you how much you took out of your pretax account so you'll know how much you need to report on your taxes. If you don't properly report the Roth IRA conversion, you could end up owing a lot more in taxes and penalties to the Internal Revenue Service.

Conversions From IRAs

Step 1

Enter the total amount of the conversion from another IRA to a Roth IRA on line 11a of Form 1040A or line 15a of Form 1040, as of 2012. This amount is not included in your taxable income.

Step 2

Calculate the taxable part of the conversion using Form 8606. If you haven't made any nondeductible contributions, the entire distribution is taxable. If you have, the nondeductible part of the conversion won't be taxable. For example, if you convert your entire IRA worth $40,000 and it contains $10,000 in nondeductible contributions, only $30,000 will be taxable.

Step 3

Report the taxable part of the distribution on line 11b of Form 1040A or line 15b of Form 1040. This amount is included in your taxable income for the year.

Conversions From Other Plans

Step 1

Report the amount of the total conversion on line 12a of Form 1040A or line 16a of Form 1040. This amount is not included in your taxable income.

Step 2

Subtract the part of the conversion that was taxed when you made the contribution to the employer plan to find the taxable portion of the distribution. Nondeductible contributions are rare, so your entire distribution likely will be taxable.

Step 3

Report the taxable part of the Roth IRA conversion on line 12b of Form 1040A or line 16b of Form 1040. This amount is included in your taxable income for the year.

Items you will need

  • IRS Form 1040 or Form 1040A
  • IRS Form 8606 (if converting from an IRA)

Warning

  • You will owe income taxes on the taxable part of the Roth IRA conversion in the year you make the conversion. A special election to pay the taxes over two years applied only to amounts converted in 2010.

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About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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