Question

1099r for BOTH 2019 and 2020 contributions triggers tax

Forum|Forum|5 years ago
February 20, 2021
1 reply
0 views

Changing the $14,000 to $7,000 alleviates the tax entirely (as it should). I can't be the only one who made a contribution to my nondeductible for a backdoor conversion to Roth in early 2020 for BOTH calendar year 2019 AND 2020? Unfortunately for me, I made both contributions in early 2020 so the 1099r was generated for both in the same calendar year and I cannot figure out how I handle that in TT without creating a $400 tax on the dollars when combined.

D

DanaB27

First, if you haven't included the nondeductible contribution on your 2019 tax return then you will have to amend your 2019 tax return because the nondeductible contribution has to be reported on Form 8606. Please see How do I amend a 2019 return in TurboTax? You will need to enter the the nondeductible contribution in your 2019 tax return by following similar steps as below (only the contribution part).

To enter the nondeductible contribution to the traditional IRA:

Open your return
Click “Deductions &Credits” on the top
Click "I'll choose what to work on"
Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed $ 7,000 (on your 2019 and 2020 tax return)
Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” for your 2020 tax return (this will be "no" for 2019 assuming you didn't have any other previous nondeductible contributions prior to 2019)
If you had a basis in the Traditional IRA before then enter the amount (for your 2020 tax return you will enter the $7,000 basis from your 2019 contribution assuming you did not have other nondeductible contributions prior to 2019).
On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

To enter the 1099-R distribution/conversion ($14,000):

Click "Personal Income" on the top
Click "I'll choose what to work on"
Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
Answer "Yes" to the question "Did You Have Any of These Types of Income?"
Click "I'll Type it Myself"
Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
Click "Continue" and enter the information from your 1099-R
Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount of $14,000 next to "Amount converted to a Roth IRA account"
On the "Your 1099-R Entries" screen click "continue"
Answer "yes" to "Any nondeductible Contribution to your IRA?"
Answer the questions about the basis

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

J

JulieAblesChapinAuthor

Thanks. I had figured I needed to amend the 2019 return to add the 8606 and your instructions were helpful in doing that. But, even splitting the 1099r into two separate transactions, I STILL show a taxable amount of over $3000 when I view the preview. This ONLY happens when I add the second $7K in or when I put the pull the $14K in by downloading the 1099r. I still need a fix for how to enter separate transactions so that TT recognizes them as a 2019 and 2020 contribution in my 2020 tax filing. Help?! I've been trying to nail this for three days UGH!