I think my 1099-R is incorrect after Roth IRA rollover?

You're right to question this. When you convert a Traditional IRA to a Roth IRA, it's called a "conversion" rather than a rollover, and it is generally a taxable event - but only on pre-tax contributions and earnings. If you made non-deductible (after-tax) contributions to your Traditional IRA, you'll need to file Form 8606 to establish the non-deductible basis in your Traditional IRA. This form tracks your non-deductible contributions over time. Without this form, the IRS has no way of knowing you made after-tax contributions, and the entire conversion would be taxable. The 1099-R typically shows the full distribution amount as taxable because the financial institution doesn't track whether your contributions were pre-tax or after-tax. That's your responsibility to report on Form 8606, which will then reduce the taxable portion of your conversion.

I went through something really similar last year and was totally freaking out about the tax hit until I discovered taxr.ai (https://taxr.ai). Their system analyzed my 1099-R and other tax documents and immediately flagged that I needed to file Form 8606 for my non-deductible contributions. It saved me thousands in taxes because it correctly calculated my basis in the Traditional IRA before conversion. The tool even explained that SkyBridge (and other brokers) always report the full amount as taxable because they don't track whether you made deductible or non-deductible contributions - that tracking is your responsibility! The report they generated made it super clear how to handle this on my tax return, which was a lifesaver because my regular tax software was trying to tax the entire amount just like yours is.

I was skeptical about taxr.ai when I first heard about it, but I bit the bullet and tried it with my complicated Roth conversion situation. Honestly, I was blown away. The system immediately identified that my custodian had reported my entire conversion as taxable when about 40% was actually after-tax contributions. The report showed me exactly how to complete Form 8606 to properly track my non-deductible basis, and even pointed out a missed deduction from a previous year that I could still claim. I was able to take the report to my tax preparer who confirmed everything was correct. It saved me from overpaying about $4,200 in taxes! Definitely worth checking out if you've got IRA conversion issues like the original poster.

If you're struggling to get answers from SkyBridge about your 1099-R, you might want to try Claimyr (https://claimyr.com). I was in a similar situation with an incorrect 1099-R last year, and after weeks of waiting on hold with the IRS, I gave their service a try. They got me connected to an actual IRS agent in about 15 minutes instead of the 2+ hours I was spending on hold. The agent walked me through exactly how to handle the reporting of my IRA conversion and confirmed I needed Form 8606 to establish my basis. They even helped me understand how to document everything in case of an audit. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Honestly, getting direct confirmation from the IRS gave me peace of mind that I was handling everything correctly.

I have to apologize to Profile 12 about Claimyr. After dismissing it as BS, I was desperate enough to try it when I couldn't get through to the IRS about my own 1099-R issue. I'm honestly shocked that it worked exactly as described. I got a call back in about 25 minutes saying they had an IRS agent on the line. The agent confirmed that I needed to file Form 8606 for my non-deductible contributions and explained exactly how to calculate the taxable portion of my conversion. Previously I'd spent three separate afternoons on hold for 2+ hours and never reached anyone. This saved me so much time and frustration, and now I actually understand how to fix my tax return. Consider me a convert - sometimes the solutions that sound too good to be true actually work!

Just want to add some clarity here - the key thing you need to understand is the difference between a ROLLOVER and a CONVERSION: - Rollover: Moving money from one tax-advantaged account to another with the SAME tax treatment (Traditional to Traditional or Roth to Roth) = NOT a taxable event - Conversion: Moving money from pre-tax to after-tax treatment (Traditional to Roth) = TAXABLE event (but only on pre-tax amounts) What you did was a Roth CONVERSION, which is generally taxable. But since you made non-deductible contributions (meaning you didn't take a tax deduction when contributing), only the growth would be taxable. Form 8606 is absolutely critical here. You must file it to establish your basis (the amount you've already paid tax on).

Has anyone used TurboTax to handle this Form 8606 situation? I'm trying to figure out if it can properly handle non-deductible contributions and Roth conversions without messing everything up.