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wilx75
New Member

Help, taxed on IRA distribution

In 2021 I made two 6,000 contributions to my traditional IRA. One contribution was marked for 2020 and the other for 2021. I then subsequently converted that money (12,000) to a ROTH IRA and received a 1099-R in the amount of 12,000.02. 

 

In 2020, I input the 6,000 traditional IRA contribution and did not get a deduction because of eligibility purposes. 

 

I have filled out my 2021 return which includes:

- 6,000 contribution to traditional IRA (non deductible for eligibility, followed the backdoor roth instructions to input the conversion)

- 12,000.02 distribution (1099-R with exception (2))

 

I am being taxed on 6,000 of the distribution. Can someone help understand why?

2 Replies
fanfare
Level 15

Help, taxed on IRA distribution

Double check how you entered the non-deductible election.

That's a critical step of the process.

Form 8606 is required for both years.

 

@wilx75 

dmertz
Level 15

Help, taxed on IRA distribution

The result suggests that the amount on line 14 of your 2020 Form 8606 (should be $6,000) did not carry forward to line 2 of your 2021 Form 8606.  Go through the IRA contribution section again, indicate that you made and tracked nondeductible contributions to your traditional IRA, then make sure that your total basis as of December 31, 2020 shows $6,000.  (Your 2020 contribution made in 2021 is treated by law as if it was made on December 31, 2020; TurboTax's wording is misleading.)

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