How do I preview Form 8606 before filing in Turbotax Online?

[gg96]

I’m able to preview the Form 1040 under Tools, but how do I preview Form 8606 if I have recharacterization and backdoor IRA?

[DanaB27 · Accepted solution]

Please follow these steps to preview Form 8606 (you might have to pay first):

1. Select Tax Tools on the left and then Print Center 
2. Select Print, save or preview this year's return
3. Select federal return
4. A window will open up, scroll down to Form 8606.

Please review the instructions below for recharacterization and conversion.

You will enter the recharacterization when you enter the contribution to the Roth IRA:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “Roth IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount 
7. Answer “Yes” to the recharacterized question on the “Switch from a Roth To a Traditional IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
8. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.
9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" (if you are thinking about doing a backdoor Roth. 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 Form 1099-R for the conversion: 

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R
4. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
5. On the "Review your 1099-R info" screen click "Continue"
6. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
7. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

[Edited 3/5/2023 | 7:00 am PST]

@gg96

[gg96]

@DanaB27 FYI. On Roth IRA recharacterization bullet #7, the “Did You Change Your Mind?” screen has been replaced with "Tell Us How Much You Transferred" screen. I had a confusion on this last night, and link to the question is below. I personally think Turbotax shouldn't use the "Transferred" jargon because Transferred is described as Recharacterization plus earnings or losses on the next screen (Roth IRA Explanation Statement).

"Tell Us How Much You Transferred" screen Post: https://ttlc.intuit.com/community/retirement/discussion/re-what-is-tell-us-how-much-you-transferred-...

Also, what is the recommendation on "Let Us Track Your Roth IRA Basis" screen? Is it necessary to click Yes and follow the prompts?

[DanaB27]

Yes, generally it is a good idea to let TurboTax track your basis. Yes, TurboTax will walk you through entering your Roth basis information. 

It might also be a good idea to keep track of the Roth basis information outside of TurboTax too.

@gg96 

[gg96]

@DanaB27 For my future reference, what would be the 2022 Taxable and Non Taxable Conversions amount when I track my basis for 2023 Tax Filing next year? Is it $0 for Taxable and $6000 for Non Taxable?

Scenario:

Roth IRA Contribution: $6000

Amount when Recharacterized to Traditional IRA: $5000 (with -$1000 as the loss)

Amount when Converted to Roth IRA (backdoor IRA): $5200

If hypothetically, I contributed directly to Traditional IRA, and the amount gained prior conversion. When tracking the basis, is it $500 for Taxable and $6000 for Non Taxable?

Hypothetic scenario:

Traditional IRA Contribution: $6000

Amount when Converted to Roth IRA (backdoor IRA): $6500

[DanaB27]

TurboTax should automatically carry over the amounts to 2023 but it would be a $0 2022 conversion contribution taxable and a $5,200 2022 conversion not taxable (since the conversion amount was $5,200 and you should have a basis of $800 left on line 14 of Form 8606 to carry over to 2023).

Yes, if you only made a $6,000 direct nondeductible traditional IRA contribution for 2022 and had gained $500 before the conversion and it would be a $500 2022 conversion contribution taxable and a $6,000 2022 conversion not taxable. 

You will be able to find this information on your IRA information worksheet Part V (balance carryover to 2023).

@gg96 

[gg96]

@DanaB27 , what does $800 carry over mean in my case? Because I can’t claim losses in IRA. 

Also, is $800 the number I should also see on my 2022 Form 8606 on line 14? Then, it’ll show up again in 2023 line 14?

What is worksheet Part V (balance carryover to 2023)?

[DanaB27]

Yes, if you converted the full amount and all your traditional/SEP/SIMPLE IRAs were $0 on December 31, 2022, then the basis on line 14 of your 2022 Form 8606 should be $800 for the example given. You had a $6,000 basis (nondeductible contribution) for 2022 and then converted $5,200 (because you had a loss) and used $5,200 of your basis. Therefore, you should have an $800 basis left.

This $800 basis is carried over to next year, to line 2 of your 2023 Form 8606 (if it isn't carried over you can enter it during the contribution interview or during the retirement distribution interview).

Worksheet Part V (balance carryover to 2023):

• Line 59 should be $0 for the 2022 conversion contribution taxable at conversion and
• Line 60 should be $5,200 for the 2022 conversion not taxable at conversion.

@gg96 

[gg96]

@DanaB27I've got $800 for line 14 on Form 8606. Though, is it correct that Line 7 = $200 & Line 8, 11, 16, & 17 = $5000?

Line 7:

Enter your distributions from traditional, SEP, and SIMPLE IRAs in 2022. Do not include rollovers (other than repayments of qualified disaster distributions, if any, from 2022 Form(s) 8915-F (see instructions)), qualified charitable distributions, a one-time distribution to fund an HSA, conversions to a Roth IRA, certain returned contributions, or recharacterizations of traditional IRA contributions

Line 8:

Enter the net amount you converted from traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2022. Also, enter this amount on line 16

Line 11:

Multiply line 8 by line 10. This is the nontaxable portion of the amount you converted to Roth IRAs. Also, enter this amount on line 17 

Line 16:

If you completed Part I, enter the amount from line 8. Otherwise, enter the net amount you converted from traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2022

Line 17:

If you completed Part I, enter the amount from line 11. Otherwise, enter your basis in the amount on line 16

[DanaB27]

It seems you only entered $5,000 as converted therefore TurboTax assumes that $200 were cash withdraws. Did you have $200 taxes withheld in box 4? If you didn't replace the $200 withheld taxes with other funds then you converted only $5,000.

Please review your entries:

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R
4. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
5. On the "Did you convert the gross amount of $xxxx (Box 1) to a Roth IRA?" screen review your selection.

@gg96 

[gg96]

@DanaB27 you're right. Instead of selecting "Yes, all of this money was converted to a Roth IRA", I inputted $5000. Is this incorrect even though the recharacterized amount was $5000? It grew $200 within Traditional IRA before converted to Roth IRA.

[JulieS]

Yes, you should select "Yes, all of this money was converted to a Roth IRA" because the entire amount on the 1099-R was converted to a Roth IRA. 

[ojmn]

I followed this instruction to preview my 8606 but after "

1. Select Print, save or preview this year's return" step it goes to pay option and when I chose pay later option ( since i want to make sure all forms are corre before pay and proceed ) it never showed federal options as explained above, am I missing anything here ? Thanks !

[gg96]

You have to pay first unfortunately @ojmn 

[LindaS5247]

You can view your entire return or just your 1040 form before you e-file in TurboTax Online:

1. Sign in to your TurboTax account
2. Open or continue your return
3. Select Tax Tools from the menu (if you don't see this, select the menu icon in the upper-left corner)
4. With the Tax Tools menu open, you can then:
   1. Preview your entire return: Select Print Center and then Print, save or preview this year's return (you may be asked to register or pay first)
   2. View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu

You can preview your return in the TurboTax CD/Download software by following these steps:

1. With your return open in TurboTax, select Preview from the File menu at the top. (If you don't see "Preview," open your return, not just the program).
2. In the pop-up window, choose the set of forms you wish to see (all official forms, specific forms, etc.) and select Preview.
3. Scroll down to view all the forms if you chose to preview multiple forms