Yes, you can convert the amount in a single conversion. This conversion will be reported on your 2024 tax return since it happen in 2024.
On your 2023 tax return you will enter the nondeductible traditional IRA for 2023:
- Login to your TurboTax Account
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “traditional IRA”
- Answer “No” to “Is This a Repayment of a Retirement Distribution?”
- Enter the amount you contributed
- Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
- Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
- Enter your basis in the Traditional IRA from your 2022 Form 8606 line 14 (if you had a basis in the prior year)
- 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).
You will have a basis on line 14 of the 2023 Form 8606 and this will be carried over to your 2024 tax return.
Next year on your 2024 tax return follow the steps below.
To enter the nondeductible contribution to the traditional IRA for 2024:
- Open your return
- Click “Deductions &Credits” on the top
- Click "I'll choose what to work on"
- Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
- Select “traditional IRA”
- Answer “No” to “Is This a Repayment of a Retirement Distribution?”
- Enter the amount you contributed
- Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
- 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
- Enter your basis in the Traditional IRA from your 2022 Form 8606 line 14 (if you had a basis in the prior year)
- 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:
- Click "Federal Taxes" on the top and select "Wages & Income"
- Click "I'll choose what to work on"
- Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
- Answer "Yes" to the question "Did You Have Any of These Types of Income?"
- Click "I'll Type it Myself"
- Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
- Click "Continue" and enter the information from your 1099-R
- Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
- 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"
- On the "Your 1099-R Entries" screen click "continue"
- Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
- Answer the questions about the basis from line 14 of your 2022 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs
Please see How do I enter a backdoor Roth IRA conversion? for additional information.
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