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adampierce
Level 2

Backdoor Roth IRA - need help. On May 1st, I made two $6k transactions to new traditional IRA accounts intent is 6k each for 2019 and 2020. I then recharacterized 12k.

Not sure how to enter this.  Getting message income is too high ($252k magi), but that was the whole idea of the backdoor.  Non-deductible IRA contributions then get recharacterized/converted to Roth IRA.  How do I enter this into Turbotax?  Tried many times
3 Replies
DavidD66
Expert Alumni

Backdoor Roth IRA - need help. On May 1st, I made two $6k transactions to new traditional IRA accounts intent is 6k each for 2019 and 2020. I then recharacterized 12k.

Based on your question, you may not have entered the information property to report your Traditional to Roth conversion.  A back door Roth is a term used to describe a method of funding a Roth IRA when your modified adjusted gross income (MAGI) is too high to allow you to directly contribute to a Roth IRA.  A back door Roth consists of opening a Traditional IRA and making a fully non-deductible contribution to the Traditional IRA.  The Traditional IRA can then be converted to a Roth IRA without any income limitations or restrictions on your MAGI.  

 

For Step-Step instructions on how to enter your back door Roth, see the following TurboTax Help Article:

 

How do I enter a backdoor Roth IRA conversion?

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adampierce
Level 2

Backdoor Roth IRA - need help. On May 1st, I made two $6k transactions to new traditional IRA accounts intent is 6k each for 2019 and 2020. I then recharacterized 12k.

It looks like we are halfway there.   Specifically, my 1099-r shows the $6k conversion for 2019 and $6k conversion for 2020 (i.e. $12k total).  Once that form is entered, my federal tax goes up and it appears TurboTax online thinks I have tax due, presumably for the 2019 conversion.  Since IRA contributions for 2019 were possible all the way to July 2020 (I did mine in May 2020), then the resulting 1099-r could have backdoors for two possible years (i.e. my 2020 1099-r has data for my backdoor activity for 2019 *and* 2020).  How do I enter this?

SamS1
Expert Alumni

Backdoor Roth IRA - need help. On May 1st, I made two $6k transactions to new traditional IRA accounts intent is 6k each for 2019 and 2020. I then recharacterized 12k.

Split the one 1099R into 2 pseudo 1099Rs for input into TurboTax,  First would be for the $6,000 Roth Conversion for 2020 following the steps in the Conversion link.  The other enter as a normal and make sure the  "Taxable Amount not Determined" box is checked.  After you are back to the summary and continue.  At the screen "Any non deductible contributions to IRA?"-Yes.  Net Screen ask for "Total Basis"-$6000.  That should wipe out the taxability of the 2019 Roth conversion.

 

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