Make sure that the 2024 non-deductible Traditional IRA contribution has been entered into the return, and that the prior year (2023) contribution has been included in the basis of the Traditional IRA for your wife. Once this has been done, then the conversion to the Roth IRA should be non-taxable.
For good measure, be sure you are following the steps in the TurboTax article below and pay attention to the last section regarding whether you need to file a Form 8606 to account for the 2023 contribution if it was not reported on your 2023 tax return and Form 8606. This section will also give you steps to enter the basis of the Traditional IRA of your wife.
How do I enter a backdoor Roth IRA conversion?
@ndesai2005
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