Doing a "backdoor
Roth" in TurboTax is a 2-step process. Be certain to enter your basis before entering any 1099-R. Follow the steps below in the order given, for the desired outcome.
First, select in your open
return, My Account>Tools>Topic Search. Type traditional
IRA and GO. Enter the contribution to the Traditional
IRA (TIRA) that you made. This is not a characterization. Select No on
the page, Did You Change Your Mind? Depending on your
income and if you have a retirement plan at work, TurboTax will either tell you
that your contribution is not deductible or it will ask you "Do you
want to make your IRA contributions nondeductible?" Select Yes.
Once TurboTax knows
that your TIRA contributions are nondeductible (that is, you
have a basis in your TIRA), then enter your 1099-R. Select My
Account>Tools>Topic Search. Type 1099r and GO. For
a Roth conversion, the 1099-R usually has a Distribution Code 2 in Box 7. That
means it is an early distribution but an exception applies so there is no
penalty.
To check that the
right results show, look at your 1040 form. Select My
Account>Tools>View Tax Summary. Then select the gray
Preview my 1040 from the top of your screen. There should be no
entry on Line 32 for IRA deduction. The Box 1 amount from your 1099-R should
appear on Line 15a of your 1040, but Line 15b should be zero.
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