Backdoor Roth IRA Contributions - 2022 & 2023

Forum|Forum|2 years ago
January 29, 2024
2 replies
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Hello,

For the tax years of 2022 and 2023, I made backdoor contributions to my Roth IRA as my MAGI exceeded the Roth IRA contribution limits. In 2022, I made the contribution in fiscal year 2023, but for tax year 2022 (i.e. I contributed the money in January 2023 for tax year 2022). For tax year 2023, I made the contribution in December of 2023. In both cases, all the contributed money to my Traditional IRA was recharacterized into my Roth IRA as soon as the transaction settled.

In total my contributions were $6K in 2022 and $6.5K in 2023, the max contributions in both years.

I have completed my taxes for the current year and I think I entered my taxes correctly for the 2022 and 2023 to capture both backdoor contributions. However, on my 2023 taxes, I am being told that I have an excess contribution for $6.5K in 2023. I confirmed that I filled a Form 8606 in 2022 detailing out the contribution I made for that tax year.

All in, I feel like I am lost here as my understanding is that everything I have done so far is correct under the backdoor contribution procedures.

Any help is greatly appreciated. Also happy to provide more details where needed.

TurboTax PLUS Online

AnnetteB6

Since the message you are seeing is related to the 2023 contribution, revisit that section of your return where you entered the Traditional IRA non-deductible contribution for 2023. Just double-check your answers in that section and see if the error goes away.

Also, if it does not, take a look at the following TurboTax help article to see the process step-by-step:

How do I enter a backdoor Roth IRA conversion?

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cchilton18Author

Edit: I think the source of the error might be coming from the "Tell Us How Much You Transferred" portion. The question asked is how much of my Traditional IRA contribution did I "recharacterize" to a Roth IRA contribution. As I made a backdoor Roth IRA contribution, the amount I should answer this question with is $0, correct? Due to the nature of the backdoor Roth IRA, I am contributing to a Traditional IRA and not recharacterizing that contribution to a Roth IRA contribution, right? Going through the whole section again after answering this question with $0 does not state that I over contributed to my Roth IRA (which makes sense) and it states that I am not eligible for the IRA deduction (which makes sense).

So I have gone back through the Traditional IRA Contribution section again on my return and I am still getting the same result at the end of the section. I then followed the steps as laid out on the link provided and still got the same message stating that I over contributed to my Roth IRA in 2023 by $6,500. I know this cannot be the case because I contributed $6,500 to my Traditional IRA in tax year 2023 and subsequently moved that same contribution to my Roth IRA when it settled (i.e. completing a backdoor Roth IRA contribution).

I have reconfirmed that I have a Form 8606 from my 2022 taxes, but I think the source of this problem is related to the fact that my 2022 contribution was made in January of 2023 for tax year 2022. This is show on the 1099-R I have received for 2023 which states I have $12,500 in Traditional IRA contributions then Roth IRA conversions, even though that $12,500 covers the contribution made for 2022 in 2023 as well as my contribution made for 2023 in 2023.

fanfare

Employee

A conversion cannot result in an excess contribution to the Roth.

You must have told TurboTax you contributed to your Roth.

That is not allowed since you used your allowable amoun on the Traditional IRA.

@cchilton18

Anonymous

Hey I have the same exact issue and know that I need to get my 8606 to look the way you are describing. I have been clicking different options and cannot get the $6500 from 2023 to show up on line 1. I do have the $6000 from 2022 shown on line 2.