Question

Backdoor Roth IRA contribution

Forum|Forum|5 years ago
April 18, 2021
1 reply
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In early 2020, I contributed the maximum amount for 2019 and 2020 to an IRA for both my spouse and I, and did a backdoor roth IRA with those funds.

After I finished inputting the 1099-R (which reflects the max amount for both 2019 and 2020) in my 2020 taxes, it says that I will incur a penalty because I exceeded the maximum amount I can contribute in 2020.

What is the proper way to handle the 2019 contribution? Do I need to amend my 2019 taxes? To make matters worse, I have hard copies of my tax returns for 2019, but my computer crashed and do not have access to the 2019 tax return file.

D

DanaB27

Yes, you will need to enter the contribution for 2019 on your 2019 tax return and not your 2020 tax return. Please amend your 2019 return if you did not include the contribution before.

If you have the hardcopy of your 2019 tax return only then you will have to recreate the tax return in TurboTax 2019 before amending the return.

You will enter the contribution on your 2019 tax return like this:

Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed
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” if you had a nondeductible contributions before this tax year.
If you had a basis in the Traditional IRA before then enter the amount.
On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

On your 2020 tax return you will enter the 2020 contribution like this:

Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed
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” since you had a nondeductible contributions before in 2019.
Enter the basis amount.
On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
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 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 and value