DanaB27
Expert Alumni

Retirement tax questions

No, you did not make a recharacterization you made a conversion which is entered in the retirement section. Also, do not enter this as a Roth contribution.

 

Please be aware, that generally, a conversion is 100% taxable unless you had a basis (after-tax) funds in the traditional IRA. If you had pre-tax and after-tax funds in the traditional IRA then the pro-rata rule applies and each distribution/conversion will have a taxable and nontaxable part.

 

You stated you had after-tax funds in the traditional IRA? Did you enter your basis form Form 8606 line 14 when TurboTax asked (steps 6 and 7)? 

 

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 "Review your 1099-R info" 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 last filed Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

 

 

Or did you make nondeductible contributions to the traditional IRA in 2021?

 

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).

 

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