How do I enter a backdoor Roth IRA conversion?

A backdoor Roth IRA allows you to get around income limits by converting a Traditional IRA into a Roth IRA. Contributing directly to a Roth IRA is restricted if your income is beyond certain limits, but there are no income limits for conversions.

Doing a backdoor Roth conversion is a two step process.

TurboTax Online

Step 1:  Enter the Non-Deductible Contribution to a Traditional IRA

1. Open your return if it’s not already open.
2. Inside TurboTax, search for ira contributions and select the Jump to link in the search results.
3. Select Traditional IRA on the Traditional IRA and Roth IRA screen and continue.
4. Answer Yes to Did you Contribute To a Traditional IRA?
5. Answer No to Is This a Repayment of a Retirement Distribution?
6. On the Tell Us How Much You Contributed screen, enter the amount contributed and continue.
7. Answer No on the Did You Change Your Mind?
8. Depending on your situation, answer the remaining questions.

Step 2:  Enter the Conversion from a Traditional IRA to a Roth IRA

1. Inside TurboTax, search for 1099-r and select the Jump to link in the search results.
2. Answer Yes on the Your 1099-R screen and continue.
   • If you land on the Your 1099-R Entries screen, select Add Another 1099-R.
3. Select how you want to enter your 1099-R (import or type it in yourself) and follow the instructions.
4. Answer No to Did You Inherit the IRA from (payer)?
5. Answer I moved the money to another retirement account (or returned it to the same retirement account) on the What Did You Do With The Money From (payer)?
6. Next, choose I converted all of this money to a Roth IRA account.
7. Continue answering questions until you come to the Your 1099-R Entries screen.

To check the results of your backdoor Roth IRA conversion, see your Form 1040:

1. On the left side of your screen, select Tax Tools, then Tools.
2. Under Tool Center, select View Tax Summary.
3. On the left side of your screen, select Preview my 1040.
   • Your backdoor Roth IRA amount should be listed on 1040 Postcard, Line 4  as IRA distributions.
   • Taxable amount should be zero unless you had earnings between the time you contributed to your Traditional IRA and the time your converted it to Roth IRA, then the earnings would be taxable.
   • Schedule 1, Line 32 IRA deduction, should be blank.
4. Select Back on the left side of your screen to return to where you left off in TurboTax.

TurboTax CD/Download

Step 1: Enter the Non-Deductible Contribution to a Traditional IRA

1. Open your return if it’s not already open.
2. Search for ira contributions and select the Jump to link in the search results.
3. Select Traditional IRA on the Traditional IRA and Roth IRA screen and continue.
4. Answer Yes on the Did you Contribute To a Traditional IRA? screen.
5. Answer No on the Is This a Repayment of a Retirement Distribution?
6. On the Tell Us How Much You Contributed screen, enter the amount contributed and continue.
7. Answer No on the Did You Change Your Mind?
8. Depending on your situation, answer the remaining questions.

Step 2: Enter the Conversion from a Traditional IRA to a Roth IRA

1. Inside TurboTax, search for 1099-r and select the Jump to link in the search results.
2. On the Your 1099-R screen, answer Yes to Did you have any of these types of income in 2018? and continue.
   • If you land on the Your 1099-R Entries screen instead, select Add Another 1099-R.
3. Select how you want to enter your 1099-R (import or type it in yourself) and then follow the instructions.
4. You should get the following screen, Good News: You Don’t Owe Extra Tax on This Money. Continue.
5. Answer No to Did You Inherit This IRA?
6. On the What Did You Do With The Money From This Payer? screen, select I moved the money to another retirement account (or returned it to the same retirement account).
7. Next, choose I converted all of this money to a Roth IRA account.
8. Continue answering questions until you come to the Your 1099-R Entries screen.

To check the results of your backdoor Roth IRA conversion, see your Form 1040:

1. Select Forms in the upper right hand corner of the screen.
2. Select Form 1040 from the menu in the left side of the screen.
3. Use the scroll bar to find:
   • Line 4a IRAs, pensions, and annuities. Your backdoor Roth IRA amount should be listed.
   • Line 4b Taxable amount should be zero unless you had earnings between the time you contributed to your Traditional IRA and the time you converted it to Roth IRA.
4. Select Schedule 1 from the menu in the left side of the screen. Line 32 IRA deduction should be blank.
5. To return to where you left off in TurboTax, select Step-by-Step in the upper right corner of the screen.