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Get your taxes done using TurboTax
Yes, you will have to report the contribution for 2020 on your 2020 tax return. Please see How do I amend my 2020 return? If the contribution is nondeductible then TurboTax will create Form 8606 with a basis on line 14 to carry over to 2021 (enter in steps 8 and 9 when you enter your 2021 contribution on your 2021 tax return)..
If you contributed $6,000 for 2020 then your basis on line 14 on your 2020 Form 8606 would be $6,000.
Yes, you will use the value from your year-end statement. If you only had one traditional IRA and converted all in 2021 then your value would be $0 on December 31, 2021.
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
- 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).
To enter the 1099-R conversion:
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Click "Continue" and enter the information from your 1099-R
- 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”
- On the "Review your 1099-R info" screen click "continue"
- Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
- Answer the questions about the basis from line 14 of your 2020 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs
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April 8, 2022
4:58 AM
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