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Category: Tax Advice

What is an IRA Rollover vs. an IRA Conversion?

If you "roll over" an IRA you are moving it from one company to another. You have 60 days from the time you receive the funds from one company to invest it with the other company before it becomes taxable to you.

 

To make an entry for an IRA Rollover in our program go to Federal section > Enter Myself > IRA/Pension and Social Security Benefits >Add or Edit an IRA- 1099-R > then make your entries and mark the check box in the lower left corner of the screen. It states "Check here if all/part of the distribution was rolled over, and enter the rollover amount."

If you "convert" an IRA, you are CHANGING it ("converting it") from a traditional IRA to a ROTH IRA.

 

Nondeductible IRAs  To make this entry in our program go to Federal section > Deductions > Enter Myself > Adjustments > Nondeductible IRAs (Form 8606) . Make the entry on the line that states "Net amount converted from traditional, SEP, and SIMPLE IRAs to Roth IRAs".