Hi,
I followed the instructions in the solution exactly yet I am still being taxed on the IRA contribution.
I'm hoping that someone may be able to help me with my special situation.
I opened a first ever Traditional IRA with $7000 in order to then convert it using a backdoor Roth. This did grow to 7030.36 before the conversion was done so I'm aware that I should be taxed on the $30.36 that was the increase.
$7030.36 was distributed, of this unfortunately 10% federal ( $703) and 5% state ($355) was taken out, but I expected that I'd be able to get that back during tax filing.
My 1099 R shows gross distribution ( box 1) $ 7030.36 taxable Amount (box 2) $7030.36 and box 2B is checked ( taxable amount not determined)
Box 7 Distribution code is '2'
IRA SEP SIMPLE has a Y in the box.
Federal Withholding $703.04
State Withholding $355.03
Box 9b is blank
I think I have to somehow figure out how to tell Turbo Tax that the $7K contribution was made with before tax money and should not be taxed, that I should be refunded the tax that was indeed withheld and not get any further taxes from this amount.
When I do the IRA contributions portion
I entered: Tell us how much you contributed to 2019 traditional IRA: $7000 ( nothing between Jan 1-April 15, '20)
Did you change your mind? No
Any Excess IRA Contributions before 2019? No
Any nondeductible contributions to IRA? No ( this is the first year doing a post tax traditional IRA with rollover to Roth, so I can see it is not deductble, so I'd want to do this for now for NEXT year I'd think , but I didn't do this for 2018 prior)
Value of Traditional IRS on Dec31 '19 : zero ( it was all converted to Roth by then)
When I look at my preview of 1040 line 4 shows me IRA distribution of $7030 and line 4b taxable amount shows $3522 - which seems crazy to me - this is what I think should actually be $30 ( for the amount the Trad IRA increased before it was converted to Roth)
Any help you can provide is greatly appreciated!
