Why is TT showing my IRA to ROTH Conversion amount on line 5 of 1099-R Worksheet instead of line 4? The whole non-deductible amount went to the my ROTH, so...?

[lowryjb]

TT Premier not handling IRA to ROTH Conversions well.  :(  I think it has correctly made my Conversion a non-taxable event, but on the 1099-R Worksheet, it is showing the total distribution on line 5, which is the amount NOT converted to ROTH. Since ALL my gross amount was converted to ROTH should I zero out line 5 and put that amount on line 4 instead? Why can't TT figure this out? This should be a VERY EASY and COMMON transaction (IRA to ROTH Conversion).

[dmertz]

I think that you mean lines 4 and 5 of the Form 1099-R Summary.  TurboTax has nothing called a 1099-R "Worksheet".

The result you presently are seeing implies that you did not indicate that any of the gross amount was rolled over to a Roth IRA.  Go back and edit the Form 1099-R reporting the distribution from the traditional IRA.  Be sure to indicate that you moved the money to another retirement account and the you converted the entire amount to Roth.

[lowryjb]

Great, and WHERE do I do that? And yes, I am reading '1099-R Worksheet' in my Turbotax Premier and I'm guessing this is the designation given to this form by the IRS.

[dmertz]

It seems that you might be making entries in forms mode.  Making entries in forms mode, particularly on TurboTax's 1099-R form, is prone to error.  Errors resulting from entries in forms mode are not covered under TurboTax's accuracy guarantee.

Make the 1099-R entries only in step-by-step mode under Wages & Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R) and answer the follow-up questions.  I suggest going there, deleting the existing Form 1099-R and reentering it.

[Thistle1955]

I tried to do this for TY 2022 on TT, 20K conversion from IRA to Roth, with 20% withholding, and ended up with a $1200 penalty (6%), apparently because I called it a contribution, not a conversion, in the TT algorithm, by mistake, but I am still not sure how exactly to do it all correctly next year.

[fanfare]

@Thistle1955 

You have to fix this error with an amended 2022 tax return.

you will be paying 6% every year until you take care of it.

[Thistle1955]

Thanks for the reply.

I did file an amended return, but am still not sure I know how to do it correctly next year.

[Cynthiad66]

A backdoor Roth IRA allows you to get around income limits by converting a traditional IRA into a Roth IRA. Contributing directly to a Roth IRA is restricted if your income is beyond certain limits, but there are no income limits for conversions.

You’ll receive a Form 1099-R with code 2 in box 7 (or code 7 if your age is over 59 ½) in the year you make your Roth conversion. You should report your conversion for the year you receive this 1099-R:

• If you received this form in 2022, complete both steps below to report it on your 2022 taxes
• If you'll receive this form in 2023, wait to report it on your 2023 taxes. In this case, only complete Step 1 below for your 2022 taxes. You’ll complete both steps next year when filing your taxes for 2023

How to Report a 2022 Backdoor IRA to Roth in TurboTax

@Thistle1955