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Retirement tax questions
@kiran885 wrote:
Thank you for the response. Please clarify my understanding -
- For the year 2020 return - I am not going to disclose any information about my IRA contribution.
- For the year 2021 return - I have to show the information as per 1099R. Is that ok to show withdrawal in 2021 without showing contribution in 2020
Incorrect on one, correct on the other.
1) An IRA contribution *for* 2020 that was made before April 15, 2021, MUST be reported on your 2020 tax return. You should mark it in the TurboTax IRA contributions section as a non-deductible contribution if you converted it to a Roth. The non-deductible contribution should produce a 8606-T form as part of your 2020 tax return showing the 2020 non-deductible contribution in box 1, 3 and 14.
2) The conversion in 2021 must be reported next year on your 2021 tax return. You will need the 2020 8606 line 14 value (from #1 above) when reporting the 2021 1099-R for the conversion.
A backdoor Roth is a 2 step procedure - a non-deductible contribution on a 8606 form and a Roth conversion on a 1099-R form using the 8606 information.