JulieS
Expert Alumni

Retirement tax questions

It sounds like you didn't enter your IRA basisThere are two steps to report a Backdoor Roth in TurboTax.  Based on your question, you skipped the first step.

 

First, take care of the Traditional IRA contribution:

  1. Search for IRA contributions using the search box in the upper right corner .
  2. Click on the Jump to link.
  3. Check the box showing that you contributed to a Traditional IRA. 
  4. The next screen asks you to verify that you contributed to a Traditional IRA, choose Yes.
  5. The next screen asks if the contribution was a repayment of a retirement distribution, choose No.
  6. Next, enter the amount that was contributed to the Traditional IRA.
  7. The next screen is asking if you “recharacterized” the contribution.  This is different from a conversion, so the answer is No.
  8. On the next screen, is a question about whether you are covered by a retirement plan at work.  Answer according to your situation. 
  9. Following that, is a question about Excess IRA Contributions.  Answer this according to your situation.
  10. The next question is, "Were there any nondeductible contributions to the IRA?"  The answer here is Yes.
  11. The next page asks for the basis of the Traditional IRA.  If you have never made nondeductible contributions in the past and kept them in the Traditional IRA, your basis is zero.  Otherwise, enter the amount shown as total basis on your most recently filed Form 8606.

If the first step doesn't solve your problem, review your 1099-R following these steps:

  1. Search for 1099-R, distribution from an IRA using the search box in the upper right corner.
  2. Click on the Jump to link.
  3. Enter the information exactly as it appears on your Form 1099-R.  Pay special attention to Box 2b, Box 7, and the IRA/SEP/SIMPLE check box.  Click Continue.
  4. The next screen asks whether you inherited the IRA.  Answer No.
  5. The next screen asks what you did with the money.  Answer I moved the money to another retirement account.
  6. Then, choose I converted all of this money to a Roth IRA account
  7. Finally, there will be a question asking if any of the money was moved back to the traditional IRA.  Answer No.

One final note, if the Traditional IRA earned any money before it was converted to the Roth IRA, those earnings will be taxable on your return. 

 

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