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How to I code my conversion from IRA to Roth where part of the IRA is non-taxable? I'm using the Desktop Home & Business version.

Last year, I contributed $6K to my IRA. I was above the AGI limit so that contribution was not tax-deductible.
I then converted my entire IRA to Roth - both the $6K I had contributed, plus additional amounts that were already in there. I got a 1099-R for the full amount showing that it is taxable. But $6K of that money was not tax-deferred, so I'm being double taxed on that $6K. Is there a way to exclude that from the taxable amount in TurboTax, using the Desktop Home & Business version?


Thanks so much
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3 Replies
AnnetteB6
Expert Alumni

How to I code my conversion from IRA to Roth where part of the IRA is non-taxable? I'm using the Desktop Home & Business version.

Yes, you will exclude the non-deductible IRA contribution from being taxed by entering the basis of your Traditional IRA account.

 

This can be done in the Personal > Deductions and Credits > Retirement and Investments > Traditional and Roth IRA Contributions section of your return.  

 

As you get started in that section, check the box that you have a Traditional IRA and go through the screens until you see a question about 'any non-deductible contributions' to your IRA.  Check 'yes' and then enter the total basis of the account as of the end of 2021.  Remember, this is only asking for the non-deductible contributions that were made, not the total value of the IRA.  

 

Use the following steps to jump directly to the section where you will enter the Traditional IRA basis:

 

  • On the top row of the TurboTax screen, click on Search  
  • This opens a box where you can type in “IRA contributions” (be sure to enter exactly as shown here) 
  • The search results will give you an option to “Jump to IRA contributions
  • Click on the blue “Jump to IRA contributions” link 
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How to I code my conversion from IRA to Roth where part of the IRA is non-taxable? I'm using the Desktop Home & Business version.

Thank you so much for the quick reply. The thing is, the balance in the IRA was 0 at the end of 2021.

 

During 2022, I did the following:

1) Contributed $6,000 to the IRA

2) Rolled over a traditional 401(k) to the same IRA

3) Converted the entire balance to a Roth IRA

 

So entering the basis might not work as you suggested. Any other tips?

AnnetteB6
Expert Alumni

How to I code my conversion from IRA to Roth where part of the IRA is non-taxable? I'm using the Desktop Home & Business version.

My apologies, I missed the detail that you made the non-deductible contribution to the IRA in 2022.  In that case, you need to enter the contribution as part of your 2022 tax return.  That is what will include the non-deductible amount as part of your basis in the Traditional IRA.

 

Follow the same steps as shown above to get to the IRA section of your return.  This time, be sure to enter the $6000 contribution that you made to the Traditional IRA.  If your income is too high to allow a deductible contribution, then the default will be that it is non-deductible, and thus included as basis in the account.  

 

If you need a more detailed step-by-step instruction, see the following TurboTax help article.  Click the CD/download link in the article and follow the information in Step 1: Enter the Non-Deductible Contribution to a Traditional IRA.

 

How do I enter a backdoor Roth IRA conversion?

 

@tax111119991 

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