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January 31, 2024
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Traditional IRA contribution with after tax dollar, back door to Roth

  • January 31, 2024
  • 2 replies
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I made a $6500 contribution to a traditional IRA in 2023.  I recharacterized the same amount to a Roth IRA in 2023.  I received a 1099-R showing a gross distribution of $6500 (plus a few cents from interest) in box 1 and a taxable amount of $6500.32 in box 2a.  Box 7 code is 2, and in 2b, taxable amount not determined and the total distribution boxes are checked.  There was nothing left in the traditional account when I moved it all to the roth.

 

The distribution from the 1099-R should not be taxable as is was entirely made with after-tax money and there was nothing else in the account.  However, I can't get turbotax to recognize the money as non-taxable or figure out how to enter an accurate cost basis for 2023, I only see options for 2022 and before, which are not relevant since the account only ever held what I immediately recharacterized.

 

How I can I get turbotax to not count this distribution as a taxable event?

 

 

    Best answer by AnnetteB6

    There is a step-by-step guide available to help you report a back door Roth contribution.  Essentially, you would first report the non-deductible Traditional IRA contribution and then enter the details from the Form 1099-R answering the follow-up questions to say that the distribution was converted to a Roth IRA.

     

    For the details, see the following TurboTax help article:

     

    How do I enter a backdoor Roth IRA conversion?

     

    If you are still having problems after going through the guide, please share any on screen messages you are seeing and someone will try to help further.
     

    2 replies

    AnnetteB6Answer
    January 31, 2024

    There is a step-by-step guide available to help you report a back door Roth contribution.  Essentially, you would first report the non-deductible Traditional IRA contribution and then enter the details from the Form 1099-R answering the follow-up questions to say that the distribution was converted to a Roth IRA.

     

    For the details, see the following TurboTax help article:

     

    How do I enter a backdoor Roth IRA conversion?

     

    If you are still having problems after going through the guide, please share any on screen messages you are seeing and someone will try to help further.
     

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    Employee
    January 31, 2024

    Your Form 1099-R reports a Roth conversion, not a recharacterization.