RaifH
Expert Alumni

Get your taxes done using TurboTax

Yes, you report the non-deductible contribution in 2020 and then the conversion to a Roth in 2021 when you receive the 1099-R if you made the non-deductible contribution between January 1, 2021 and May 17, 2021 for the 2020 tax year.

 

If you reported the contribution as non-deductible, you should find Form 8606 in your 2020 return.  Line 14 should have your total basis, which should be the amount of your 2020 contribution ($7,000). In 2021, if you again made a $7,000 non-deductible contribution, you would enter that in the Traditional and Roth IRA Contributions section of your return. When entering this year's contribution, it should also ask Let's find your IRA basis. You will enter that line 14 amount from your 2020 Form 8606. You will then mark this year's contribution as nondeductible. If your 2020 Form 8606 has the amount of your contribution on Line 14, then you did everything correctly last year and you will not have to file an amended return. 

 

You should also have received Form 1099-R for $14,000 which captures the conversion of both your 2020 and 2021 contributions. You will again confirm the amount of your IRA basis at the beginning of the year when entering Form 1099-R. It will also ask you the balance of all your IRAs at the end of the year. 

 

Between your basis carryover from last year and your nondeductible contribution this year, the entire conversion should be nontaxable if you have nothing left in your traditional IRAs after making the conversion. 

 

@Wyldaisy