To report a backdoor Roth correctly, it is important to enter the 1099-R into the system correctly and answer the follow-up questions so that the conversion is reported as it should be on the return. I suggest that you delete that 1099-R and re-enter it, and make sure you follow the following instructions:
- 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.
- 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.
- Next screen: Did You Inherit the IRA from This
Payer? Probably No. Hit Continue.
- 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.
- After a few screens relating to Disaster Payments, you
come to a screen asking Any Nondeductible Contributions to Your
IRA? Click YES and Continue.
- 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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