Contribute to Traditional IRA then convert to Roth IRA

Forum|Forum|2 years ago
February 16, 2024
1 reply
0 views

in Sep 2023 (I am 61) I contributed $7500 into my Traditional IRA (started with a $0 balance), the next day I moved that money to my Roth IRA. Turbotax is telling me that only $3300 of the $7500 was allowed and the remaining is Excess Contributions subject to a 6% penalty.

The $7500 contributed to the Traditional IRA was After Tax dollars.

Where am I going wrong with Turbotax data entry since there should be no issue converting this into the Roth from the Traditional and I fill out a form 8606 stating that the $7500 would not be pre-tax.

Best answer by dmertz

When entering the traditional IRA contribution, be sure to answer No when asked if you "switched" (recharacterized) the contribution to be a Roth IRA contribution instead. The Roth conversion is entered separately by entering the From 1099-R that reports the distribution from the traditional IRA.

Also, to be eligible to make a traditional IRA contribution you must have sufficient compensation on a W-2 of from self-employment to support the contribution.

dmertzAnswer

Employee

Also, to be eligible to make a traditional IRA contribution you must have sufficient compensation on a W-2 of from self-employment to support the contribution.