Looking ahead to tax prep time for tax year 2020, and assuming that I had taken distributions in 2020 from my TIRA as follows:
WITHHOLDING TAX — $40k
ROTH CONVERSION — $30k
QCD — $20k
How should lines 4a and 4b be filled out on my 2020 Form 1040?
[assuming lines 4a and 4b are still being used as in 2019 Form 1040]
AlanD
4a should show the gross distributions, but that amount is not clear. It would be a minimum of 90,000 but would be more if you kept an amount in addition to the withholding, QCD, or conversion. You will need Form 8606 for the conversion portion only. 4b should show the taxable amount, which would be 70,000 minimum but could also be higher if you distributed more than 90,000 total. Also assumes no IRA basis.
Permalink Submitted by tomd37 on Tue, 2020-06-02 16:11
The combined amount of the Roth conversion and QCD will be reported on line 4a. The amount reported on 4b will only be the Roth conversion amount. Depending on whether you are doing a paper return or whether you are using some tax software program, you will have to indicate on the return that there is a QCD. On a paper return you write QCD just to the left of line 4b. On a tax software prepared return there will be a question somewhere asking about a reduction to the taxable amount and if answered correctly will place a notation somewhere on the return that tells the IRS there is a QCD amount that is not taxable. This reply assumes that you did not have any after tax contributions to the IRA.