Question

Late Backdoor Roth IRA

Forum|Forum|2 years ago
April 7, 2024
1 reply
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First time contributing to a backdoor Roth IRA. I contributed and converted in January 2024 for 2023 ("Late"). When prompted in Turbo tax,

"Any Nondeductible Contributions to Your IRA?

Do I select Yes or No? The prompt says for years prior

A

AnnetteB6

That question is referring to any nondeductible contributions that were made in 2022 or prior. Your 'yes' or 'no' answer depends on whether you have made any nondeductible contributions in the past, but not including the one that was made for the 2023 tax year.

You will be reporting the 2023 nondeductible Traditional IRA contribution as part of your 2023 tax return and you would not include that information at the prompt you are asking about.

Since you made the Traditional IRA contribution in 2024 for your 2023 tax year, you can only report the first half of the back door Roth IRA conversion on your 2023 tax return. The second half will be on your 2024 tax return.

When you convert a Traditional IRA to a Roth IRA, the conversion is reported on your return based on the calendar date of the conversion. It is not associated with a particular tax year (like 2023). Since the conversion took place in 2024, it will be reported on your 2024 tax return after you have received the 2024 Form 1099-R showing the Traditional IRA distribution.

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R

rhzieglerAuthor

Great thank you!

Turbo tax then states that my income was too high.

Am I ok to proceed with filing? This will essentially be fixed next year when I do part II correct?

A

AnnetteB6

If it is telling you that your income is too high to make a deductible contribution to your Traditional IRA, then you should be in good shape. The contribution will be non-deductible. For good measure, check to be sure the amount shows on Form 8606 line 1.

There should be nothing entered in your return with regard to a Roth IRA contribution. That will be handled next tax season with the Form 1099-R issued for the conversion.

@rhziegler

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