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March 25, 2022
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did I make nondeductible contribution in 2020?

  • March 25, 2022
  • 1 reply
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I did a contribution in 2021 but before 2020 tax due day. Should it be counted as 2020 contribution, and treated as 2020 basis?

 

but my 1099 R add this 2020 contribution to later 2021 contribution, TT reported excess 2021 contribution…

 

Was 1099 R from my bank wrong?

    Best answer by DanaB27

    No, you will enter the 2021 Form 1099-R as shown on your 2021 tax return. Did you move the funds to a Roth IRA (conversion)? In regards to the contribution, you can check on Form 5498 or your end-of-the-year statements should say how much you contributed for 2020 and for 2021.

     

    If you made a nondeductible contribution for 2020 then you will have to enter the contribution on your 2020 tax return and make it nondeductible. Then TurboTax will create Form 8606 to report the nondeductible contribution, you will have a basis  (nondeductible contribution) on line 14 of Form 8606 to carry to 2021.

     

    If you made a nondeductible contribution for 2020 then please see How do I amend my 2020 return? and follow these steps to enter the contribution to your traditional IRA on your 2020 tax return:

     

    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. If you had a basis in the Traditional IRA before then enter the amount.
    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).

     

     

     

     

    On your 2021 tax return to enter the  Form1099-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?"
    12. Answer the questions about the basis from line 14 of your 2020 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

     

     

    If you also made a traditional IRA contribution for 2021 then follow these steps to enter the nondeductible contribution on your 2021 tax return:

     

    1. Click “Deductions &Credits” on the top
    2. Click "I'll choose what to work on"
    3. Scroll down to “Traditional and Roth IRA Contributions” and click “Start
    4. Select “traditional IRA
    5. Answer “No” to “Is This a Repayment of a Retirement Distribution?
    6. Enter the amount you contributed
    7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
    8. 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
    9. If you had a basis in the Traditional IRA before then enter the amount.
    10. 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).

     

     

    @dsyhome0510

    1 reply

    fanfare
    Employee
    March 25, 2022

    Your bank sets the year to which ever year you told them you wanted it applied to.

    If you did not say, it was the year you sent in the money.

    If you want it non-deductible that is your choice but you have to tell the IRS.

     

    You don't get a 1099-R for any contribution so don't enter any 1099-R amount as a contribution.

    fanfare
    Employee
    March 25, 2022

    Why are you posting this question again after getting the answer previously. ?