How to report/amend taxes for Traditional IRA contribution made for 2016 and 2017 in the same year 2017

[jignesh123]

I contributed $5500 to Traditional IRA towards 2016 contribution in March 2017, and then contributed $5500 to Traditional IRA towards 2017 in Dec 2017. I then rollover the total $11000+Earnings to Roth IRA account.

I reported the contributions for both 2016 and 2017 in my 2017 return but I didn't do the deductions correctly and end up paying extra taxes. I now want to amend the taxes for 2017 but not sure how to report this correctly as TurboTax shows that I made exxcess contribution of $5500 to traditional IRA and owe a 6% penalty ($300) each year the excess money remains in the IRA. Whereas, I actually made that extra contribution towards previous year 2016, and didn't report in 2016 taxes because I believe I didn't have all the documents.

[dmertz]

You must amend both your 2016 and 2017 tax returns.

The contribution for 2016 was reportable on your 2016 tax return.  Was the contribution for 2016 a deductible or a nondeductible traditional IRA contribution?

[jignesh123]

Thanks for reply. The contributions were non deductible for both the years. But I did backdoor Roth IRA conversation and paid taxes on it that I shouldn’t need to pay so I’m hoping to get a refund for that.

[fanfare]

2016 - 8606 with non-deductible $5,500 contribution. That gives you a basis of $5,500

2017 - 8606 with  non-deductible $5,500 contribution and a conversion of $11,000
That uses up your basis assuming you converted immediately exactly $11,000

With a non-deductible contribution, the only thing you can do wrong is take a deduction.
In that case you would owe money back to the IRS.

[dmertz]

To expand on fanfare's answer, lines 1 and 14 of the 2016 Form 8606 will have $5,500.  TurboTax will do this automatically when you amend and enter the nondeductible traditional IRA contribution.  The $5,500 from line 14 of the 2016 Form 8606 transfers to line 2 of the 2017 Form 8606 to be added to the $5,500 on line 1 of the 2017 Form 8606.

When amending the 2017 tax return with TurboTax, click the Continue button on the Your 1099-R entries page that lists your 2017 Form 1099-R reporting the distribution from the traditional IRA that was converted to Roth, and in the questions that follow indicate that you made nondeductible traditional IRA contributions for years prior to 2017 and enter the $5,500 of basis carried in from 2016 Form 8606 line 14.  2017 TurboTax will use this to complete 2017 Form 8606 as I described above.  Also be sure to enter any year end balance you might have in traditional IRAs at the end for 2017 since this will affect the amount of basis that applies to the 2017 Roth conversion and how much basis remains in your traditional IRAs to be applied to future distributions.