Backdoor Roth for 2022 completed in 2023

[nmallick1]

I did a backdoor Roth in Jan 2023 for 2022. This is my first contributing to any type of IRA. I contributed $6000 to a traditional IRA and converted the full amount to a Roth two weeks later. I did not receive a 1099-R as my broker says I will receive it next year, since the conversion was done in 2023. Can someone please validate my steps in the Deductions & Credits portion of TurboTax Online below?

1. Select the kinds of IRAs you own: Traditional IRA only (did not check Roth IRA)

2. Is This a Repayment of a Retirement Distribution?: No

3. Tell Us How Much You Contributed:

Your total 2022 traditional IRA contributions: 6,000

Tell us how much of the above total contribution for 2022 you contributed between 1/1/2023 and 4/18/2023: 6,000

4. Did You Change Your Mind?: No

5. Any Excess IRA Contributions Before 2022?: No

6. Any Nondeductible Contributions to Your IRA? (from 2021 or prior years): No

7. I now get a screen that says: Income Too High To Deduct an IRA Contribution. Your MAGI is $1XX,XXX (don't want to put the full amount here), which puts you over the limit...

8. Your IRA Deduction: $0 

In my preview of my 1040, Line 4a (IRA distributions) shows nothing. Is this correct? Is there any other way I can check I did this correctly? 

[DanaB27]

Yes, your steps are correct and you won't see this entry on Form 1040 line 4. You will have to look for Form 8606, you will have a $6,000 entry on lines 1, 3, and 14.

Your basis from line 14 will be carried over to your 2023 tax return (please verify this next year). Next year when you receive your 2023 Form 1099-R for the conversion you will follow these steps on your 2023 tax return:

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 2022 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

[nmallick1]

Thank you! How do I get the Form 8606? I answered No to 6. Any Nondeductible Contributions to Your IRA? (from 2021 or prior years): No, since I only did a nondeductible contribution for 2022. 

[AnnetteB6]

That is correct to answer 'no' to that question.  It is the 2022 nondeductible contribution that will be shown on Form 8606 which will be filed as part of your 2022 tax return.

When you have completed your return and paid to file it (if you are using TurboTax Online), then you will be able to print or preview all the forms in your return.  Form 8606 will be included.

If you are using one of the CD/downloaded versions of TurboTax, you can click the Forms button in the upper right corner of the screen to preview the tax forms at any time.  After clicking Forms, look at the list on the left side of the screen to find Form 8606.  Then highlight it and take a look at lines 1, 3, and 14 to be sure it shows $6000.

@nmallick1 

[nmallick1]

Great - thanks. And just to verify, I should select only Traditional IRA, and not Roth IRA, for the question "which types of IRA did you have or contribute to you in 2022"? I saw that in another TurboTax guide for backdoor Roth, but wanted to make sure. 

[DanaB27]

Yes, you will only select the traditional IRA since you made direct contributions only to the traditional IRA. Don’t enter anything under the Roth IRA contribution.

@nmallick1