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buzondemario
New Member

Funded traditional IRA with $11K ($5.5K for '16 and '17), then used backdoor Roth conversion. How to avoid TT from categorizing the '16 amount as '17 over-contributions?

In other words, I've been taxed on the $5.5K contributions corresponding to 2016 because I do not know how to tell TT that the funding happened in 2017, but the contribution went towards 2016
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Accepted Solutions
dmertz
Level 15

Funded traditional IRA with $11K ($5.5K for '16 and '17), then used backdoor Roth conversion. How to avoid TT from categorizing the '16 amount as '17 over-contributions?

The contribution for 2016 was reportable on your 2016 tax return.  If it was a nondeductible contribution, your 2016 Form 8606 was required to report the nondeductible contribution, resulting in the amount appearing on line 16 to be carried forward to line 2 of your 2017 Form 8606.  If you failed to report the nondeductible contribution for 2016 with your 2016 tax return, you need to file the late 2016 Form 8606.  Then in 2017 TurboTax, click the Continue button on the Your 1099-Entries page, indicate that you made nondeductible traditional IRA contributions, and make sure that TurboTax shows the amount on line 14 of your 2016 Form 8606 as your basis from years prior to 2017.

As far as your $5,500 contribution for 2017, make sure that you have entered that into 2017 TurboTax under Deductions & Credits.

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3 Replies
dmertz
Level 15

Funded traditional IRA with $11K ($5.5K for '16 and '17), then used backdoor Roth conversion. How to avoid TT from categorizing the '16 amount as '17 over-contributions?

The contribution for 2016 was reportable on your 2016 tax return.  If it was a nondeductible contribution, your 2016 Form 8606 was required to report the nondeductible contribution, resulting in the amount appearing on line 16 to be carried forward to line 2 of your 2017 Form 8606.  If you failed to report the nondeductible contribution for 2016 with your 2016 tax return, you need to file the late 2016 Form 8606.  Then in 2017 TurboTax, click the Continue button on the Your 1099-Entries page, indicate that you made nondeductible traditional IRA contributions, and make sure that TurboTax shows the amount on line 14 of your 2016 Form 8606 as your basis from years prior to 2017.

As far as your $5,500 contribution for 2017, make sure that you have entered that into 2017 TurboTax under Deductions & Credits.

buzondemario
New Member

Funded traditional IRA with $11K ($5.5K for '16 and '17), then used backdoor Roth conversion. How to avoid TT from categorizing the '16 amount as '17 over-contributions?

Thank you very much! Is it possible to file the late 2016 Form 8606 using TurboTax?
macuser_22
Level 15

Funded traditional IRA with $11K ($5.5K for '16 and '17), then used backdoor Roth conversion. How to avoid TT from categorizing the '16 amount as '17 over-contributions?

Only if you deducted the Traditional IRA contribution in 2016 and you need to amend to change it to a non-deductible contribution.

Otherwise mail in a stand-alone 2016 8606 form.

Form:  <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/f8606_16.pdf">https://www.irs.gov/pub/irs-pdf/f8606_16.pdf</a>
Instructions: <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i8606_16.pdf">https://www.irs.gov/pub/irs-pdf/i8606_16.pdf</a>\
Where to file: <a rel="nofollow" target="_blank" href="https://www.irs.gov/filing/where-to-file-addresses-for-taxpayers-and-tax-professionals-filing-form-1...>
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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