DanaB27
Expert Alumni

Retirement tax questions

When you enter the recharacterization, it will be treated as a contribution to the traditional IRA and when it is nondeductible then TurboTax will create Form 8606 with a basis in line 1. This is the first step of the backdoor Roth.

 

The second step is to enter the conversion. If you have recharacterized your 2021 Roth contribution in 2022 then the conversion will happen in 2022 and belong on your 2022 tax return. You will have a basis on your 2021 Form 8606 line 14 to carry to your 2022 tax return.

 

On your 2022 tax return:

 

  1. Click "Federal Taxes" on the top and select "Wages & Income"
  2. Click "I'll choose what to work on"
  3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)
  4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
  5. Click "I'll Type it Myself"
  6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
  7. Click "Continue" and enter the information from your 1099-R
  8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account
  9. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
  10. On the "Your 1099-R Entries" screen click "continue"
  11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
  12. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

 

 

@Anonymous

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