I did a Roth IRA conversion and answered all questions on TurboTax correctly. However, TT made my $6500 contribution taxable. What should I do to make it non-taxable?

Forum|Forum|1 year ago
August 20, 2024
2 replies
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I need to make my 1040 form line 4b be 0, but I can't figure out how to do that through answering TurboTax's series of questions.

TurboTax Deluxe Online

VolvoGirl

Employee

A Traditional IRA conversion to a ROTH IRA is normally taxable. Why do you think it shouldn’t be taxed? Did you have a after tax basis in the IRA? And why do you mention a contribution? Are you doing a back door contribution?

fanfare

Employee

If your IRA has been funded with deductible contributions, generally you won't be able to do a tax-free "backdoor contribution" to a Roth IRA.

@celerityseiche

jrdinsmore

i have this issue every year and Turbotax has never fixed it. one fix is t change the 1099r box 2a to ZERO. With so many people doing back door roths every year i am not sure how both answers think it is taxable!! you contribute on day 1 and "convert" (it seems TT thinks that is recharacterizing) the next day. that would never be a taxable event. i am so disappointed in TT!

AnnetteB6

There is no issue in TurboTax when reporting a backdoor Roth IRA conversion. It is a simple, two-step process if the non-deductible Traditional IRA contribution and the subsequent conversion to a Roth IRA take place in the same calendar year. It can be a bit more complicated if these two steps span over two years.

See the TurboTax help article below for instructions:

How do I enter a backdoor Roth IRA conversion?

Not everyone uses the 'backdoor' method when converting a Traditional IRA to a Roth IRA. The conversion can take place from any Traditional IRA, including one with deductible contributions. If that is the case, then it is not a tax-free transaction. If the taxpayer has any Traditional IRA accounts with any deductible contributions, then at least a portion of the amount converted will be taxable. TurboTax can handle this situation as well.

Also, it is never a good idea to alter your inputs of Form 1099-R to be different than what was reported to you. That's a good way to get a letter from the IRS down the road.

@jrdinsmore

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ndesai2005

May I ask on how to handle a Roth conversion of an amount spanning non-deductible contributions across 2 years?

Specifically, my wife made non-deductible contributions up to the limit to a traditional IRA in 2023 and 2024, but only converted them both to a Roth in 2024, resulting in a single 1099R distribution of both sums.

I now cannot get TurboTax to recognize this converted amount as non-taxable, whereas it recognizes mine as a non-taxable conversion just fine (same year contribution/conversions).

Thanks,
N