Hi everyone,
I'm filing with TurboTax and here I have an issue I guess that might get me taxed twice for my non-deductible IRA contribution.
I started making contribution to my traditional IRA account since 2017.
I made a first-time non-deductible contribution of $5,500 (all was non-deductible) to my IRA account in the calendar year of 2018
, and then did a full Roth conversion (including previous year’s deductible contribution) within the same financial institution. And the tax year of 2018 is the first time I need to file a Form 8606.
And therefore, my IRA balance was zero on December 31 2018 as shown on the account statement.
I only have one IRA account and one Roth IRA account as well.
When I worked through the "Wages & Income" section,I observed that the income tax was imposed on the full distribution/conversion amount, despite there was non-deductible portion included.
And now I’m going through ‘Deductions & Credits’ section, and onto the ‘Tell us the value of all your traditional IRA accounts’ page.
The instruction reads:
‘Enter or verify the value ending balance amount) of all of your traditional IRA accounts on December 31, 2018. This information is sent by mail on Form 5498.
‘Include any IRA contributions you made or will make in 2019 for 2018.
‘Include any IRA distributions you made in 2017. The amount you enter must be at least the amount of your distributions.’
Since I’m still missing a Form 5498 yet, here I'm inputting the value shown on my IRA's December statement which is zero.
My concern is: when I enter a zero as basis for the year, how could TurboTax let IRS know that there was a non-deductible portion of my distribution/conversion?
Yes the TurboTax software has got it that the $5,500 IRA contribution is non-deductible as I'm working through the ‘Deductions & Credits’ section, but it seems the amount shown on "Federal Refund (in progress) " doesn't change a bit, probably indicating that I'm still imposed income tax on the full converted amount?
Am I being taxed twice on my after-tax money?
