Hello,
I have been doing back door roth contributions for years. This is the first year in awhile that I am attempting to do my own taxes. Every time I enter the information into Turbo Tax it is showing I have a penalty. This has never happened when I had my taxes professionally prepared. What am I doing wrong?
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It sounds like you are entering your Roth IRA contribution in the Deduction & Credits section.
First, you will need to delete this entry by following these steps in TurboTax Online:
A Back Door Roth requires two steps in TurboTax.
The first step is to report your 2023 non-deductible Traditional IRA contribution on Form 8606. Please follow these steps from this TurboTax Help Article:
The second step is to report the conversion from the Traditional IRA to the Roth IRA. Assuming the conversion was in 2023, you should report your Form 1099-R as follows:
Hi,
I'm having the same issue as the original poster, and the proposed solution is not working for me. :
I am never shown the option to enter how much of my contribution is non-deductible. I have tried deleting the IRA worksheets and 1099-R's several times, but I'm always seeing the same issue. Like the original poster, I have entered backdoor Roth successfully on TurboTax for many previous years, but this year it's not working. Every time I import my 1099-R, I see the full amount of the conversion being taxed. Please help!
As stated in Step 10 above, if none of your contribution can be deducted, you won't see the option to make part of it nondeductible. Instead, the full amount of your contribution will automatically be nondeductible and reported on Form 8606.
As for the full amount of your conversion being taxed, first, make sure that the IRA/SEP/SIMPLE box is checked on the 1099-R entry screen. Next, walk through 1099-R interview questions to indicate that all of the Non-Deductible Traditional IRA contribution was converted to a Roth IRA (Step 2 above).
If these suggestions don't resolve this issue, please let me know so that I can assist you further.
Thanks so much! The IRA/SEP/SIMPLE box wasn't checked when I imported the 1099-R. Manually checking it fixed the issue! Thank you!!
You're welcome!
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