AnnetteB6
Expert Alumni

Get your taxes done using TurboTax

No, you should not limit the information shown on your Form 1099-R.  Those must be reported in your return as they were received or you are certain to be contacted by the IRS due to the mismatch between your return and the Form 1099-R.

 

Based on the information that you shared, it seems that the basis in the Traditional IRA from making a non-deductible contribution in 2022 has not been taken into account.  

 

First, you need to check your 2022 tax return to see if the contributions that you made were deducted on Form 1040 Schedule 1 line 20 or if that line is blank or zero.  If the amounts put into the Traditional IRAs are shown on that line, then those amounts will be taxable when converted to a Roth IRA.  This scenario would mean that $5500 + $513.47 would be taxable and $1452.70 + $1.89 would also be taxable on the 2023 return.

 

If the amounts were non-deductible contributions, then they should have been shown on Form 8606 for each of you and included as part of your tax return filed for 2022.  If your return did not include Form 8606, then you need to create one and file it now by mail on its own.  You will also need to enter the prior year contribution information into your 2023 return as basis for the Traditional IRA accounts.  The result of doing this will be that only the $513.47 and $1.89 portions of the distribution will be taxable.  These amounts would represent gains in the Traditional IRA that were earned before the distribution was taken and converted to the Roth IRA.  

 

Take a look at the information in the following TurboTax article.  This gives you step-by-step instructions to enter the back door Roth IRA conversion.  It seems you have probably completed the steps correctly except for the prior year (2022) basis.  Click the link If your conversion contains contributions made in 2023 for 2022 and be sure to follow those steps to finish up the process.

 

How do I enter a backdoor Roth IRA conversion?

 

@rubenandrea425 
 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"