Retirement tax questions

Yes, you will only enter the $6,000 for 2021 under IRA contributions on your 2021 tax return. The $6,000 nondeductible contribution for 2020 has to be entered on your 2020 tax return and TurboTax will create Form 8606 with a $6,000 basis on line 14. This basis has to be entered on your 2021 tax return. Please see How do I amend my 2020 return?

It depends on your state, sometimes you need to make additional entries during the state interview. What is your state? But let's get this first correctly entered on your federal return and then we can see if you need to make entries during your state interview.

If you want to see Form 8606 you will need to pay for the return before you can see it. Please follow these steps:

1. Select Tax Tools on the left and then Print Center and choose the print center.
2. Pay for the return
3. Select the return and form you want to view.

Please follow the steps below to enter your contributions and conversion. If entered correctly only the earnings should be taxable on line 4b of Form 1040 (assuming your traditional/SEP/SIMPLE IRAs were empty before you started the after-tax contributions).

On your 2020 tax return

To enter the nondeductible contribution to the traditional IRA:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions”
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed for 2020 ($6,000)
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
8. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

On your 2021 tax return

To enter the nondeductible contribution to the traditional IRA:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions”
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed for 2021 ($6,000)
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” since you had a nondeductible contributions before this tax year.
9. Enter your $6,000 basis in the Traditional IRA from line 14 of your 2020 Form 8606.
10. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

To enter the 1099-R distribution/conversion: 

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R
4. 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”
5. On the "Your 1099-R Entries" screen click "continue"
6. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
7. Answer the questions about the basis from line 14 of your 2020 Form 8606 ($6,000) and the value of all traditional, SEP, and SIMPLE IRAs