If you left the contribution in your IRA, it is nondeductible. That means you do not get a benefit from contributing this year, but any future withdrawals from your IRA will be partially tax-free to recover the basis in your IRA.
For that to happen, you have to record your nondeductible contribution and a Form 8606 needs to be included with your tax return. To do that in TurboTax:
- In the Deductions & Credits section of your Federal return, scroll down to Retirement and Investments. Click Show More and click Revisit/Start next to Traditional and Roth IRA Contributions.
- Select Traditional IRA.
- Select No to Is This a Repayment of a Retirement Distribution?
- Enter your contribution amount, making sure to put it in the appropriate box if you contributed in 2022.
- Select No to Did you change your mind?
- If this is the first time you made a nondeductible contribution to your IRA, answer No to Any Nondeductible Contributions to your IRA?
- Navigate through the rest of the questions. This should be a nondeductible contribution. If it says your income is too high to make a deductible contribution, that means it was automatically entered as a nondeductible contribution. Form 8606 will be attached to your return to record the nondeductible contribution. You will not see any tax benefit for contributing this year.
