@mmezzone wrote:
In 2020, I made contributions for both 2019 and 2020, to catch myself up for both years. (2019 contributions were made prior to 4/15/20) During 2020, I rolled all the contributions made for both years from the traditional ira, to the roth ira. I think those two issues combined are what are giving me the problem. The 1098r lists 10,494.28 on it for all the contributions. Fidelity listed distribution code 2 and checked boxes taxable amt not determined, total distribution, and ira/sep/simple. When I entered the form, they have both 10494.28 in both box 1 and 2. As a result, it is taxing me for the full amount. Based on another section I read, i changed box 2 to zero, and that is causing the issue when it goes through review check. What should I change about how I entered?
OK, Step 1. On your 2020 tax return, you only list contributions made for tax year 2020. Contributions made for tax year 2019, must be listed on your 2019 return only, even if the date of the contribution was in 2020. Such contributions could only be made prior to the due date of your tax return (July 1, 2020 for most people) and you would have to inform the IRA trustee that this was a 2019 contribution at the time it was made.
You may need to amend your 2019 return if you did not report your contributions made in 2020 but for 2019 on your 2019 return.
Then, Step 2. You withdrew all the funds and rolled them over into a Roth IRA (backdoor conversion). Enter the 1099-R exactly as it is shown, don't change the boxes. The entire amount of the rollover (contributions plus earnings) will be taxable to you on your 2020 return. When entering the 1099-R there is a question of what did you do with the money and the choices are "rollover" and "a combination of things." Choose a combination of things, and then answer that it was a Roth conversion in the next box. (The choice "rollover" to that question only means a rollover to another pre-tax traditional IRA, and the question could probably be worded better.)
