I'm above the income limit for a traditional IRA and use the backdoor method to contribute.
Here is how I contributed towards a Traditional IRA in 2024:
- Contributed $6,500 as part of 2023 contributions on Jan 2nd, 2024
- Contributed $7,186 ($186 is excess since $7000 is the limit) on July 22nd, 2024
Fidelity is saying I've contributed $13,686 into my Traditional IRA. My total cost basis as per Form 8606 in my 2023 return is $500. So TurboTax believes I owe $13,686-($7000-$500) = $6198 in taxable income.
Through the software how do I ensure this taxable income comes to $186 (which is the excess I contributed). Did I mess up in my 2023 Form 8606 (H&R Block filed it for me) which is why this issue is happening? Should the basis have been $6500 so that the excess comes to $186 only.
