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Get your taxes done using TurboTax
You will need to enter the $6,000 contribution for 2020 on your 2020 tax return. TurboTax will create Form 8606 with a $6,000 basis on line 14. You will enter this basis on your 2021 tax return when TurboTax asks about the prior basis / prior nondeductible contributions (steps 8 and 9). Please see How do I amend my 2020 return?
On your 2021 tax return to enter the nondeductible contribution to the traditional IRA:
- Login to your TurboTax Account
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “traditional IRA”
- Answer “No” to “Is This a Repayment of a Retirement Distribution?”
- Enter the amount you contributed for 2021 $6,000
- Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
- Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” since you had a nondeductible contribution before this tax year.
- Enter your $6,000 basis in the Traditional IRA from your 2020 Form 8606 line 14.
- 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).
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March 28, 2022
7:10 AM
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