Retirement tax questions

If you made nondeductible contributions to your traditional IRA in the past then you should have 2020 Form 8606 with a basis on line 14 to enter into TurboTax if it isn't carried over. Please check your 2019 and 2020 tax returns for Forms 8606 for you and your spouse (if you made nondeductible contributions in other years then check these too.) Your 2020 Form 8606 should have the total basis for 2020 and prior years on line 14 if you filed Form 8606 correctly in the previous years.

Please be aware, that if you had pre-tax funds (deductible contributions) and after-tax funds (nondeductible contributions, basis) then the pro-rata rule will apply and each distribution/ conversion will have a taxable and nontaxable part.

Please review the instructions below to make nondeductible contributions and enter a conversion.

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
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” if you had a nondeductible contribution before this tax year.
9. If you had a basis in the Traditional IRA before then enter the amount.
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 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 and the value of all traditional, SEP, and SIMPLE IRAs