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Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

I contributed $5,500 to a non-deductible IRA in 2014. My income is too high to claim a deduction for the contribution. I converted it to Roth IRA, also in 2014. Turbo tax taxes me again on the $5,500 that was after tax money. I found instructions on how to do it with the on-line version (http://thefinancebuff.com/how-to-report-backdoor-roth-in-turbotax.html) but I am using a version installed on my computer.


9 Replies
Level 7

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

The process is the same on the Desktop version of TurboTax ... just stay in the Step-By-Step mode and don't use the Forms mode.

Doing a "backdoor Roth" in TurboTax is a 2-step process.

First, go to Federal Taxes > Deductions & Credits > I'll Choose What to Work On > Retirement and Investments > Traditional and Roth IRA Contributions. Enter the contribution to the Traditional IRA (TIRA) that you made. Depending on your income and if you have a retirement plan at work, TurboTax will either tell you that your contribution is not deductible or it will ask you "Do you want to make your IRA contributions nondeductible?"

Once TurboTax knows that your TIRA contributions are nondeductible (that is, you have a basis in your TIRA), then enter your 1099-R at Federal Taxes > Wages & Income > I'll Choose What to Work On > Retirement Plans and Social Security > IRA, 401(k), Pension Plan Withdrawals (1099-R). For a Roth conversion, the 1099-R usually has a Distribution Code 2 in Box 7. That means it is an early distribution but an exception applies so there is no penalty.

To check that the right results show, look at your 1040 form. There should be no entry on Line 32 for IRA deduction. The Box 1 amount from your 1099-R should appear on Line 15a of your 1040, but Line 15b should be zero.


Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

>To check that the right results show, look at your 1040 form. There should be no entry on Line 32 for IRA deduction. The Box 1 amount from your 1099-R should appear on Line 15a of your 1040, but Line 15b should be zero.

Where can I see the final 1040 before I even file? I cannot seem to show this anywhere.
Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

My Account -> Print Center
Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

Hi, I found another way around this problem.  When entering the 1099-R data (or after importing it) in Box 7, I added code “N-Recharacterized IRA contribution made for 2014 and recharacterized in 2014”. This step took the amount out of the taxable category.  I'm going with this solution, although the form from the financial firm did not have the Box N checked, that is what actually happened, so I can defend it.

But after seeing the response from 2020hindsight, I went back and followed the original instructions from TurboTaxForrest.  That worked, but it took a while to find a problem which was on the page "Tell us the Value of Your Traditional IRA".  All three values on that page have to be zero.





Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

Recharacterization is a completely different thing. I think you need to do more research or you might find yourself doing an amended return later.
Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

I followed your guide exactly for 2014 tax(I use installed Turbotax premier, and update all the changes), but still the 15a and 15b has the same amount $6500, increasing my tax correspondingly.  I checked #2b for taxable amount not determined, #7 for code 2 for early dist, and IRA/SEP/SIMPLE.  What am I doing wrong?  Thank you.
Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

This is really confusing if you contributed to the traditional before Dec 31st and converted after Dec 31st my answer does not apply in that case. Otherwise, what was the sum total value of ALL your traditional IRAs on Dec 31st 2014? (husband and wife are separate) if it is not zero then you will not be able to convert to Roth tax free. But you will get some basis in your traditional IRA which will reduce your tax in a later year when you take funds from the traditional IRA but you will need to keep track of that basis from now until there is no money left in your traditional IRA. You can roll your traditional IRA into you company 401k to get around this problem but it is too late to do that for tax year 2014. If you go the 401k route continue to track your basis because you will want to convert back to the IRA before you withdraw the money so that you don't lose the tax benefit of the basis.
Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

Hi, see the comment I just wrote above: But after seeing the response from 2020hindsight, I went back and followed the original instructions from TurboTaxForrest.  That worked, but it took a while to find a problem which was on the page "Tell us the Value of Your Traditional IRA".  All three values on that page have to be zero.
Level 1

How To Report Backdoor Roth In TurboTax using a version installed on my computer?

Thank you very much for the comment. I found the answer here comments made by irikov <a href="https://ttlc.intuit.com/questions/2615922-procedure-for-roth-ira-backdoor-made-2013-and-2014-contrib..." rel="nofollow" target="_blank">https://ttlc.intuit.com/questions/2615922-procedure-for-roth-ira-backdoor-made-2013-and-2014-contrib...>
It was the non deductible traditional IRA contribution made by me between Jan 1 2014 and Apr 15 2014. When I unchecked the check box to that effect, the tax did not get increased for the Roth Conversion made in 2014 for the 2013 tax year.  Thank you.