BACK DOOR ROTH

[jimmyI]

I can't figure out how to input the information for a back door roth IRA.  I made a non deductable IRA contribution in 2022 and I then moved it to a Roth IRA.  

The instructions tell me to enter the non deductable IRA contribution but I can't.   I follow the steps and it tells me that my income is too high and I must reverse the contribution.  How can I get around it?  

I'm sure others have had the same problem.  Can anyone help?

[DanaB27]

If you get the message that your income is too high to deduct the traditional IRA contribution then this means your contribution will be nondeductible and TurboTax will create Form 8606. This is what you want.

Please see these steps for additional information:

To enter the nondeductible contribution to the traditional IRA:

1. Open your return
2. Click “Deductions &Credits” on the top
3. Click "I'll choose what to work on"
4. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
5. Select “traditional IRA”
6. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
7. Enter the amount you contributed
8. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
9. 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
10. Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 (if you had a basis in the prior year)
11. 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: 

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Click "I'll Type it Myself"
6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
7. Click "Continue" and enter the information from your 1099-R
8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
9. 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"
10. On the "Your 1099-R Entries" screen click "continue"
11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
12. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

[jimmyI]

Thank you DanaB27 for your very quick reply!!

Your directions ask me direct me to scroll through the screens until I see "Choose Not to deduct IRA contribution" and choose Yes.   Turbo Tax Premier online will not let me get to that screen.  Instead it goes to a screen that says "Income too high to Deduct an IRA Contribution" and does not allow an option to choose to make it non-deductable 

[DanaB27]

Yes, if your income is too high and you have a retirement plan at work you won’t get the “Choose Not to Deduct IRA Contributions” screen. TurboTax will make it automatically nondeductible and give you the warning that it isn’t deductible because your income is too high.

 Please note in the contribution instructions under step 11: “… (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)”.

@jimmyI