Backdoor Roth Conversions getting flagged as "excess contributions"

[sleschuk79]

Hi, the existing instructions on entering a backdoor roth appear out of date with the current set of questions. Each time I enter in my backdoor roth, it gets flagged as an excess contribution. There is a confusing question about recharacterization which I've been leaving blank. In doing a backdoor roth from funds contributed to a Traditional IRA, how do you answer the recharacterization questions?

[dmertz]

A backdoor Roth is a traditional IRA contribution followed by a Roth conversion.  It does not involve a recharacterization of the traditional IRA contribution.  When entering the traditional IRA contribution, answer No when asked if you recharacterized (or "switched") the contribution.

If TurboTax is flagging an excess contribution, either you mistakenly indicated that you did such a recharacterization or you separately entered a Roth IRA contribution.

[sleschuk79]

I backed out all information about recharacterization and double checked that no roth contributions were indicated.  I'm still getting the excess contribution notification.   

I suspect that there is a bug in turbotax software.  The 1099-R functionality was delayed and clearly they don't have it quite right.  The help articles also no longer match the questions you get asked.  I'd hate to move off of turbotax as I've used it for many years, but this might be the last straw.

[baldietax]

A lot of people are inputting 1099R and backdoors already it's likely working fine so I wouldn't jump to conclusion it's a TT issue - it's something to troubleshoot here if you provide more info or screenshots it might help.  I do agree the help article below for backdoor Roth doesn't seem to be updated for the new screens.  Form 8606 is also not finalized for filling not sure the sticking point but I don't think that affects these calcs.

First question just to confirm, do you have "earned" income like a W2?  Otherwise your IRA contribution is not valid and will be flagged as an excess.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...

[PDobie]

I'm having the exact same issue. I make too much to put money in a Traditional IRA so I always do the max in a Traditional and immediately roll it over into a ROTH. The instructions ARE out of date, so it makes it extremely difficult. But I have one question, the answer of which may help to resolve this. When converting from a Traditional to a Roth from the Wages and Income (Personal Income) tab, then IRA Section, and start going through my 1099R entries, I come to a screen that asks: "Tell us if you moved the money through a rollover or a conversion." There are 4 options to choose from. Outdated instructions say choose "I did a combination of rolling over, converting, or cashing out the money." If I do this I get a screen telling me I need to delete my 1099R and enter 2 of them to separate the contributions. However, I've got to believe that I should have been directed to select "I converted some or all of it to a Roth IRA." Would you suggest this is the correct way to do it?