DanaB27
Expert Alumni

Get your taxes done using TurboTax

No, your 8606 doesn't seem correct.

 

To clarify, you entered the $5,500 contribution as a nondeductible traditional IRA contribution on your 2018 tax return and $6,000 as a nondeductible traditional IRA contribution on your 2019 tax return, correct? This should have triggered the Form 8606 in those years and you have a basis of $11,500 for 2019.

 

 

Do not enter the 2020 $6,000 contribution as a traditional IRA contribution you will have to enter the recharacterization like this:

 

  1. Open TurboTax 
  2. Click on "Search" on the top right and type “IRA contributions”
  3. Click on “Jump to IRA contributions"
  4. Select “Roth IRA
  5. Answer “No” to “Is This a Repayment of a Retirement Distribution
  6. Enter the Roth contribution amount $6,000
  7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount $6,000 (no earnings or losses)
  8. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.
  9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes"

 

To enter the conversion from the 1099-R:

  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 “What Did You Do With The Money” and choose “I moved it to another retirement account
  5. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
  6. On the "Your 1099-R Entries" screen click "continue"
  7. Answer "yes" to "Any nondeductible Contribution to your IRA?"
  8. Answer the questions about the basis ($11,500) and value

 

You will have on line 14 Form 8606 the $6,000 basis from the 2020 contribution and will enter your 2021 conversion with the steps above on your 2021 tax return (enter $6,000 basis in step 8).

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