@Emily-E-Dougherty make sure you marked in the follow-up questions that you had an inherited IRA. To clarify, you made an nondeductible Traditional IRA contribution for 2024 in 2024 and converted it ...
See more...
@Emily-E-Dougherty make sure you marked in the follow-up questions that you had an inherited IRA. To clarify, you made an nondeductible Traditional IRA contribution for 2024 in 2024 and converted it in 2024?
Please note if you had any gains then this would be taxable. Also, if you had any other pre-tax funds in your IRA then the pro-rata rule applies. This means that with each distribution/ conversion you will have a taxable and nontaxable part.
@JFalin Please see the instructions below for TurboTax Desktop:
To enter the nondeductible contribution to the traditional IRA:
Open your return
Click “Deductions &Credits” on the top
Click "I'll choose what to work on"
Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed
Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had nondeductible contributions before this tax year
Enter your basis in the Traditional IRA from your 2023 Form 8606 line 14 (if you had a basis in the prior year)
On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).
To enter the 1099-R conversion:
Click "Federal Taxes" on the top and select "Wages & Income"
Click "I'll choose what to work on"
Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
Answer "Yes" to the question "Did You Have Any of These Types of Income?"
Click "I'll Type it Myself"
Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
Click "Continue" and enter the information from your 1099-R
Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
On the "Your 1099-R Entries" screen click "continue"
Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs
