Back door roth. 1099r has two years of contributions 17 and 18 that I converted to roth in 18. TurboTax is taxing one or both of them. How do I illustrate in the program?

 
DanielV01
Expert Alumni

Retirement tax questions

Make sure of the following entries. You probably did not enter that your 2017 contribution made in 2018 created 2017 nondeductible TIRA basis. Keep in mind you may want to delete the 1099-R that reports the conversion and start over to make sure you are picking up on all of the screen instructions that follow:

  1. Enter in the information as reported on the 1099-R for this IRA in the main portion of the screen (box 2a should be blank, and "taxable amount not determined" should be checked, and box 7 probably has a code 2).  Hit Continue.
  2. Next screen says Good News: You Don't Owe Extra Tax on This Money (this means there's no penalty, but the income still needs to be reported correctly to be removed from taxable income).  Hit Continue.
  3. Next screen:  Did You Inherit the IRA from This Payer?  Probably No.  Hit Continue.
  4. The next screen asks:  What Did You Do With The Money From This Payer?  First, select I moved the money...and then I converted all of this money to a Roth IRA account.
  5. After a few screens relating to Disaster Payments, you come to a screen asking Any Nondeductible Contributions to Your IRA? Click YES and Continue.  
  6. Enter how much was your total Basis on December 31, 2017.  This is the amount of total nondeductible contributions you've made throughout the years.  This information is on Form 8606 from your 2017 tax return.  

You will still have a few questions after this, but you will see the portion of your distribution that was from your nondeductible contributions will have been excluded from your taxable income.

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Retirement tax questions

Thank you.. my 1099r reports that 13k is taxable portion..is it ok to manually enter and deviate from the 1009r and leave blank?  The program had stated to enter exactly as the 1099r reads..
DanielV01
Expert Alumni

Retirement tax questions

Enter as reported on the 1099R, but by entering the basis the taxable portion is backed out.
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Retirement tax questions

No it is not OK.   The IRS gets the 1099-R from the payer.  What you report must match the 1099-R.

This usually happens for 3 reasons:
1) You failed to enter the 2018 Traditional IRA contribution in the IRA contributions interview and specify that it is to be a non-deductible contribution.
2) You failed to enter the 2017 Tradition in the 2017 contribution interview and make it nondeductible and have a 2017 8606 form showing the carry froward "basis" in box 14.
3) Your total 2018 year ending  Traditional IRA value of all existing Traditional IRA accounts was not zero.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Retirement tax questions

Thank you macuser_22.. looks like #2 is my issue.  I can revisit my return from last year later but how can I enter correctly for this year since the program carries info over from last year?  

Retirement tax questions

#6 in the answer above.   The interview asks for the prior years non-deductible basis with is the 2017 8606 box 14 value.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**