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February 6, 2021
Question

I follow the steps doing the back door Roth and turbotax is still showing a taxable distro. I select "I converted some or all of It to a Roth IRA", then say "all of It"

  • February 6, 2021
  • 1 reply
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I do this every year, but the software this year seems broken

1 reply

February 6, 2021

Make sure you enter your basis from the nondeductible traditional IRA contribution and/or made the 2020 contribution traditional IRA nondeductible.  Otherwise a conversion will be included in your taxable income.  Review steps4-6 from the contribution entry and steps 4-5 from the 1099-R entry.

 

To enter the nondeductible contribution to the traditional IRA:

  1. Login to your TurboTax Account 
  2. Click on the Search box on the top and type “IRA contributions”
  3. Click on “Jump to IRA contributions"
  4. Select “traditional IRA
  1. Answer “No” to “Is This a Repayment of a Retirement Distribution?
  2. Enter the amount you contributed
  3. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  4. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes
  5. If you had a basis in the Traditional IRA before then enter the amount.
  6. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

 

To enter the 1099-R distribution/conversion: 

  1. Login to your TurboTax Account 
  2. Click on the Search box on the top and type “1099-R”
  3. Click on “Jump to 1099-R”
  1. Click "Continue" and enter the information from your 1099-R
  2. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA
  3. On the "Your 1099-R Entries" screen click "continue"
  4. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
  5. Answer the questions about the basis

 

To preview your 1040 to check your entries:

  1. Click on "Tax Tools" in the left menu
  2. Click "Tools"
  3. Click "View Tax Summary" in the Tool Center window
  4. Click on "Preview my 1040" on the left
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