TurboTax Keeps Taxing My Backdoor IRA Conversion - Not my first year to convert

Forum|Forum|5 years ago
July 12, 2020
1 reply
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I have been doing a backdoor conversion from a Traditional IRA to Roth for a number of years. Each year it is not taxed, but this year TurboTax keeps designating it as taxable. I have delete and reentered, watch videos, read posts, etc. I'm beyond frustrated. This is not my first time and I cannot fix it. I have been working on this for days.

Background:

I'm over 59-1/2

I contributed $7000 to my Traditional IRA which has a $0 basis.

I made the 2019 contribution to the Traditional IRA in March 2020 along with a 2020 contribution for $7000 each year.

The conversion for both 2019 and 2020 was done a few days later plus $0.92.

I did not receive a 1099-R.

The non-taxable conversion amounts for prior years show up correctly in TurboTax.

I have gone through all the steps as I previously stated and got the answers as expected, but TurboTax designates it as taxable on the 8606 and therefore increased my tax due.

Note: I do have an inherited Traditional IRA that I have had for several years. It has never impacted my conversions. If I remove it, the same taxable situation occurs to the conversion.

H E L P ! All help is appreciated and I haven't even gotten to adding my mother-in-law as a dependent along with her care.

Bsch4477

Level 15

When you convert a traditional IRA to a Roth, you will owe taxes on any money in the traditional IRA that would have been taxed when you withdrew it. That includes the tax-deductible contributions you made to the account as well as the tax-deferred earnings that have built up in the account over the years. That money will be taxed as income for the year you make the conversion.

jls76112Author

Level 2

The basis in the Traditional IRA was and has been $0 at the both the beginning and ending of each year. There are no pre-tax contributions in the Traditional IRA. All of the contribution into the Traditional IRA that are then converted are post-tax.