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Hi DanaB27,

 

Thank You so much for your response and clearing up my confusion as the other lines on 8606 did not seem relevant. Yes, I do not have a basis from prior years and no conversion or distribution either. I have completed lines 1,3,14 accordingly.

 

For reference my Vanguard 1099-R shows the following lines that have any values in them:

1 Gross distribution $13,500.00
2a Taxable amount $13,500.00
2b Taxable amount not determined (X)
Total distribution ( )
7 Distribution code(s) 2
IRA/SEP/SIMPLE (X)

16 State distribution $13,500.00

 

And so then I also tried to enter my 2024 nondeductible contribution to the traditional IRA for 2024 per your detailed and helpful instructions below, however once I reach the 1099-R conversion stage, and follow those instructions, my federal and state taxes increase (I should not see any increase), so I am lost as to why this is happening.  (Note: In step 7 of 1099-R conversion instructions, I entered $6500 for the prior year basis)

 

I would greatly appreciate it if you could advise, what I am doing wrong at this stage.

 

Thanks so much for your help.

 

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  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 2023 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 the Form 1099-R conversion: 

 

  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
  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 "Continue"
  6. Answer "Yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
  7. Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs