I think that you mean lines 4 and 5 of the Form 1099-R Summary.  TurboTax has nothing called a 1099-R "Worksheet".

The result you presently are seeing implies that you did not indicate that any of the gross amount was rolled over to a Roth IRA.  Go back and edit the Form 1099-R reporting the distribution from the traditional IRA.  Be sure to indicate that you moved the money to another retirement account and the you converted the entire amount to Roth.

Great, and WHERE do I do that? And yes, I am reading '1099-R Worksheet' in my Turbotax Premier and I'm guessing this is the designation given to this form by the IRS.

It seems that you might be making entries in forms mode.  Making entries in forms mode, particularly on TurboTax's 1099-R form, is prone to error.  Errors resulting from entries in forms mode are not covered under TurboTax's accuracy guarantee.

Make the 1099-R entries only in step-by-step mode under Wages & Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R) and answer the follow-up questions.  I suggest going there, deleting the existing Form 1099-R and reentering it.

I tried to do this for TY 2022 on TT, 20K conversion from IRA to Roth, with 20% withholding, and ended up with a $1200 penalty (6%), apparently because I called it a contribution, not a conversion, in the TT algorithm, by mistake, but I am still not sure how exactly to do it all correctly next year.

@Thistle1955 

 

You have to fix this error with an amended 2022 tax return.

you will be paying 6% every year until you take care of it.

Thanks for the reply.

I did file an amended return, but am still not sure I know how to do it correctly next year.

A backdoor Roth IRA allows you to get around income limits by converting a traditional IRA into a Roth IRA. Contributing directly to a Roth IRA is restricted if your income is beyond certain limits, but there are no income limits for conversions.

You’ll receive a Form 1099-R with code 2 in box 7 (or code 7 if your age is over 59 ½) in the year you make your Roth conversion. You should report your conversion for the year you receive this 1099-R:

• If you received this form in 2022, complete both steps below to report it on your 2022 taxes
• If you'll receive this form in 2023, wait to report it on your 2023 taxes. In this case, only complete Step 1 below for your 2022 taxes. You’ll complete both steps next year when filing your taxes for 2023

 

How to Report a 2022 Backdoor IRA to Roth in TurboTax

 

@Thistle1955