So, I understand the Backdoor IRA contributions are to be entered as Traditional IRAs ( non deductibale contributuions). Then I am supposed to the enter the 1099-R info and the taxable income should essentially come down to 0.
The thing is TT keeps telling me that my "Income is too high to deduct the IRA contribuition" and it also says I have an excess contribution and will pay a 6% penalty. I just dont understand this.
Last year (2019), I made a back door IRA contribution of 5500 ( for TY 2018) and 6000 ( for TY 2019). So since the conversion happened in 2019, I received a 1099-R this year ( 2020), listing total distributions of 11500. I have gotten to the point where form 8606 basically says I owe no taxes but I am not sure why the Income is too high and excess contribution penalty assessed.
Please help. TT needs to have a designated Backdoor IRA Step by Step questions. Whats the point if the software cant make this easier
