How to do backdoor Roth IRA conversion for TY 2021 in 2022?

[kwei-chan]

There is a helpful article for Roth IRA conversion.  I would like to know if the steps laid out there still are applicable if I made a nondeductible contribution and then conversion to Roth IRA soon after in 2022 (before 4/18/22), but for TY2021.

Thanks.

Kwei

[DanaB27 · Accepted solution]

Please see the instructions below they include steps on how to enter a basis from a previous year.

To enter the nondeductible contribution to the traditional IRA for 2021 on your 2021 tax return:

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 “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
9. If you had a basis in the Traditional IRA before then enter the amount.
10. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (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).

TurboTax will create Form 8606 with a basis on line 14 to carry over to 2022 (enter on your 2022 tax return).

Next year on your 2022 tax return to enter the 1099-R 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