After you file

Thank you, I reviewed your return. You entered a recharacterization in the IRA contribution section. A conversion is not a recharacterization. Please, see the instructions below and remove the recharacterization with step 7.

To enter the nondeductible contribution to the traditional IRA:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed
7. On the "Tell us how much you transferred" screen remove the entry for the recharacterization
8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
9. Enter your basis in the Traditional IRA from your 2023 Form 8606 line 14 (if you had a basis in the prior year)
10. 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).

Please note lines 6 to 12 are empty on Form 8606 since TurboTax is using the Taxable IRA Distribution Worksheet to calculate the nontaxable part on line 13 as indicated by the *. It seems you had a pre-tax balance at the end of the year and therefore the pro-rata rule applies and each each distribution/ conversion you will have a taxable and nontaxable part. You can see the remaining basis on line 14 of Form 8606, this basis can be carried forward. 

To clarify, you made a traditional IRA contribution in 2024 for 2024 and then converted this amount right away in 2024? Did you have any other pre-tax funds in all of your traditional/SEP/SIMPLE IRA account?  Because if not then your balance at the end of the year should be $0. Please check your end of the year statement to verify your balance on December 31, 2024 and edit you entry if necessary (step 7 below).

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 “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”
5. On the "Review your 1099-R info" screen click "Continue"
6. Answer "Yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
7. Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs