Skip to main content
April 3, 2023
Question

Accounting for backdoor roth conversion for 2021 and 2022

  • April 3, 2023
  • 1 reply
  • 0 views

Hi all,

 

I have done three backdoor roth conversions for 2021, 2022, 2023.  I mistakenly did not report the conversion for 2021 on my 2021 return, as I completed the conversion in April 2022.  I am mailing a Form 8606 to the IRS showing a $6,000 non-deductible contribution for 2021.  Now though, when entering my information from the 1099-R (which shows both the $6,000 2021 contribution and the $6,000 2022 contribution), TurboTax still has $6,000 listed as taxable on form 1040.  How do I get TurboTax to account for the Form 8606 I will mail in before filing?

1 reply

April 3, 2023

You will have to enter the $6,000 basis from your 2021 Form 8606 line 14 during the interview (in the IRA contribution section steps 9 and 10 or the retirement section steps 11 and 12)

 

To enter the nondeductible contribution to the traditional IRA:

 

  1. Open your return
  2. Click “Deductions &Credits” on the top
  3. Click "I'll choose what to work on"
  4. Scroll down to “Traditional and Roth IRA Contributions” and click “Start
  5. Select “traditional IRA
  6. Answer “No” to “Is This a Repayment of a Retirement Distribution?
  7. Enter the amount you contributed
  8. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  9. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had nondeductible contributions before this tax year
  10. Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 ($6,000)
  11. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

 

To enter the 1099-R conversion: 

  1. Click "Federal Taxes" on the top and select "Wages & Income"
  2. Click "I'll choose what to work on"
  3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)
  4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
  5. Click "I'll Type it Myself"
  6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
  7. Click "Continue" and enter the information from your 1099-R
  8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account
  9. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
  10. On the "Your 1099-R Entries" screen click "continue"
  11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
  12. Answer the questions about the basis from line 14 of your 2021 Form 8606 ($6,000) and the value of all traditional, SEP, and SIMPLE IRAs

 

 

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