Retirement tax questions

To confirm, you did a rollover from your 401k to your traditional IRA and then a conversion from this traditional IRA to your Roth IRA. Therefore, you have two Form 1099-R, correct?

Yes, do not enter these transactions as IRA contributions under Deductions & Credits. You will only enter your 1099-Rs and then answer all follow-up questions carefully.

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R”
3. Enter your Form 1099-R for the 401k rollover
4. On the "Did you move this money from a 401(k) to a Roth 401(k)?" screen answer "No"
5. On the "Did you move the money to a Roth IRA?" screen answer "No"
6. Continue through the questions until you can add your 2nd Form 1099-R for the conversion to Roth
7. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
8. On the "Your 1099-R Entries" screen click "continue"
9. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
10. Answer the questions about the basis from line 14 of your 2020 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

Please be aware, if you only had pre-tax funds in the traditional IRA then this conversion will be taxable.

A backdoor Roth only works correctly if all traditional, SEP, and SIMPLE IRAs are empty before starting backdoor Roth. Then you can make nondeductible IRA contributions and it is best to convert the contribution right away to avoid earnings that would be taxable in a conversion.