Hi, does anyone know the steps for doing a Roth conversion? My wife has a traditional IRA and a Roth IRA. We are considering moving some money from the traditional to the Roth.
How does that work with the broker AND in Turbo Tax?
Thanks, Rick
You should ask this question of your broker as the method is likely unique to them. Turbo tax will ask you (over about 5 pages) about your distribution and if it went to a roth. It is more complex than it needs to be in my opinion and is prone to cause some confusion.
If both accounts are with the same broker it should be simple. On my broker’s web site it is under Transfer. I have to tell it how much to convert, and how much Federal and State withholding to take out. For me, taxes have to come out of the conversion, so the amount reaching the ROTH is reduced by that much, but if I had funds outside the IRA I would consider moving 100% and paying estimated.
I’ve been doing these for years, and using Turbo Tax even longer. As far as I remember I just use the tax information provided by my broker as TT asks for it. No hassles so far.
Thanks. I can’t find in TT where to enter a conversion. I wanted to do that first, to see the tax implications, before I actually do the conversion.
The search feature in TT is terrible. It doesn’t help at all. Where do you enter the conversion?
Thanks
Oh, here’s a big question I forgot to ask: if I do the conversion now, can that go on last year’s tax return or do I have to wait until next year to enter it in this year’s tax return?
The converted amount will be taxed at your marginal rate. There will be interactions with things like ACA premium tax credits that are income based. But unless the law changes, the premium tax credits changed significantly from 2025 to 2026. So using a 2025 software to estimate what will happen in 2026 will likely give you a very incorrect answer. So you need to proceed with significant caution in using your 2025 software to do this. I would suggest using Dinkytown’s tax estimator for 2026 when they publish it.
The conversion is documented on Form 8606. The tax form you would enter to get the information into the Form 8606 is a 1099-R, generally either with a Box 7 code 2 (if under 59 1/2) or a Box 7 code 7 (if 59 1/2 or over). Then, the tax software should ask you if any of the distribution was a Roth conversion. You would answer yes, and tell the software how much of the amount was converted. I haven’t used TurboTax for 15 or 20 years, so I don’t know if there are any specific things to watch out for with that software.
Please note: If you have taxes withheld from the distribution, only the amount that actually makes it into the Roth is considered converted. If you are under 59 1/2, any amount withheld is subject to the 10% early withdrawal penalty.
Conversions are entered on the tax form for the calendar year in which they occur. If you didn’t do a conversion in 2025, you wouldn’t enter anything about a conversion on your 2025 return. A conversion done in March, 2026 would go on the 2026 return (due date April 15, 2027).
AJ
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No. Contributions can be made for the prior year but all conversions are booked to the year in which you make them.
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Hi AJ,
Thanks for your help and expertise 
We aren’t eligible for the ACA so I don’t have to worry about that. But I’ll check out Dinkytown tax estimator later this year before proceeding.
As far as using 2025 TurboTax, I can convert $15K w/o any tax consequence. $15250 to be exact.
Thanks,
Rick
Keep in mind that is based on last years taxes and does not apply to a conversion completed this year. Good rule of thumb but if you have any variable income or deductions, I would not cut it quite that close.
Sounds like you didn’t use all of your deduction for ordinary income and used it instead for some capital gains/qualified dividends. Too bad you don’t have a way back machine so you could go back and do a 2025 conversion.
If the calculation you did was not using anticipated 2026 numbers, that estimate is worth the paper it’s written on. Even if you are using anticipated 2026 numbers, at a minimum, there will still be inflation adjustments, so you do need to use a 2026 estimator, not your 2025 software.
AJ
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Hi @RBMunkin,
When I started doing annual conversions in 2010, I had to call my broker, USAA, and we did it over the phone. I told him/her the cash amount, stock tickers and share counts to move, they entered it and I could see the moves in my browser.
Later on, they added a web page. When they moved everything to Schwab, I found the interface very simple to use including withholding tax.
I did annual conversions for 13 years and it was done. I placed emphasis on depressed stock and fast growers to convert first, to get that growth in our Roth IRA’s.
Does that help you?
Gene
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