DanaB27
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To confirm, you made the contribution for 2022 and 2021, then converted it in 2022, and then took a distribution from the Roth IRA in 2022.

 

Q1) No if you entered the nondeductible contributions and conversions correctly none of it will be taxable (assuming all of your traditional/SEP/SIMPLE IRAs were empty on December 31, 2022).

 

Q2) No, unfortunately, you can no longer deduct losses from a Roth IRA (since 2018). Please see Are Losses on a Roth IRA Tax Deductible? for details.

 

First, please make sure you had entered the nondeductible contribution for 2021 on your 2021 tax return and had the basis on line 14 of the 2021 Form 8606. This will be entered on your 2022 tax return.

 

To enter the nondeductible contribution to the traditional IRA:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions” 
  3. Click on “Jump to IRA contributions"
  4. Select “traditional IRA
  5. Answer “No” to “Is This a Repayment of a Retirement Distribution?
  6. Enter the amount you contributed
  7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
  9. Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 (if you had a basis in the prior year)
  10. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

 

To enter Forms 1099-R for the conversion and distribution from the Roth IRA 

 

  1. Click on "Search" on the top right and type “1099-R”  
  2. Click on “Jump to 1099-R”
  3. Click "Continue" and enter the information from your 1099-R  code 2
  4. 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
  5. On the "Review your 1099-R info" screen click "Add Form 1099-R"
  6. Enter your Form 1099-R with code J
  7. On the "Review your 1099-R info" screen click "Continue"
  8. Answer the questions until the "Any nondeductible Contributions to your IRA?" screen and answer "yes" since you had any nondeductible contributions in prior years.
  9. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs
  10. Answer the follow-up Roth IRA question.

 

 

 

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