Backdoor Roth IRA and "Income Too High"

Forum|Forum|2 years ago
February 25, 2024
2 replies
5 views

I attempted to follow the steps for entering a backdoor Roth IRA conversion from the TurboTax article, however only parts 1 through 9 under Step 1 match the screens that I see.

After part 9, I see "Tell Us How Much You Transferred". I enter 0 since this isn't a transfer.

Next, I see "Any Excess IRA Contributions Before 2023?". I select No

Next, I see "Any Nondeductible Contributions to your IRA". I select "Yes, I made and tracked nondeductible contributions to my IRA."

Next, it asks for the Total Basis as of December 31, 2022. I enter 0 as this is a first; no prior Form 8606.

Next, I see "Tell Us the Value of All Your Traditional IRA Accounts". I enter the value from Form 5498.

Next it says I make too much and can't deduct it.

When I go to the end anyways, the Form 8606 definitely isn't filled out correctly.

Any advise on how to proceed?

-Thank you

TurboTax Premier Online

PNY61Author

Level 2

A little more info on the 8606: Line 13 has a value in it but it is not the same as the amount on Line 3. Not sure where the value on Line 13 is coming from.

dmertz

Level 15

When entering the traditional IRA contribution, you mistakenly told TurboTax that you "switched" (recharacterized) your traditional IRA contribution to be a Roth IRA contribution instead. You did not recharacterize, your converted. Got back and edit your traditional IRA contribution entry and answer No when asked if you switched (or say that the amount that you switched was zero).

PNY61Author

Level 2

Thank you! On the Income side, I had a non-zero value in "Outstanding Characterizations". Corrected that to 0. Unfortunately, even though Form 8606 is updated, Lines 13 and 14 are still not the same.

I already checked with Fidelity. They indicated I have everything I need. Of course, they can't provide tax advice, but as far as data goes, it should work out. I watched a couple Youtube videos of folks stepping through this process and I can't tell what I'm doing wrong.

At this point, I'm tempted to do a "Clear & Start Over".