I contributed $7000 after tax to Traditional IRA and rolled over to RothIRA. I am not deducting that but TurboTax treats this as my income based on 1099-R. How to fix?

[psobon]

1099-R Box 1 and 2a are $7000. Box 2b is checked (both Taxable amount not determined and Total distribution). Box 7 - distribution code is 2, doesn't seem to be correct. IRA/SIMPLE/SEP box is checked. Other boxes are empty.

[baldietax]

= backdoor Roth - this is a "conversion" not a "rollover".  check the steps below and make sure you've answered the questions after the 1099-R input to identify it as a Roth conversion

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...

[psobon]

@baldietax Thank you for clarification, indeed, this was a conversion, I learnt that conversion and rollover are 2 different things and the difference between them is very important. Thank you for the link it helped. Summarizing, 1099-R is a form provided by my bank serves as "a hint" and actually, the 1040 fields are important and they should be as in the page you shared. Good.

I have 1 more question. In 2025 I transferred money to TradIRA for both 2024 (in Jan'25) and 2025 (Nov'25) so my 1099-R states $14000. Should I report $14000 contribution in in 2025 tax return or I should report $7000 in 2025 tax return and amend 2024 and add the 7000 contribution I did in Q1'25? I assume whole both $7000 contributions are non-deductible and I need Form8606 to track that, right?

[dmertz · Accepted solution]

"Should I report $14000 contribution in in 2025 tax return or I should report $7000 in 2025 tax return and amend 2024 and add the 7000 contribution I did in Q1'25?"

The latter.   Your nondeductible contribution for 2024 is required to have been reported on a 2024 Form 8606.  The $7,000 from line 14 of that form carries forward to line 2 of your 2025 Form 8606.

[baldietax]

@psobon it helps to always think of these backdoor's in 2 parts - the contribution can be backdated to the prior tax year until April 15th, but the conversion cannot be backdated it would be reported in the calendar it's done.  So your contribution would be split across 2024+2025 tracked on Form 8606, and the conversion for the entire amount is just reported in 2025.

just to clarify tho, your original post said you had a 1099-R with $7000, but your latest comment says $14000?  Did you get another 1099-R for $7000 or was that a typo.

[psobon]

I didn't want to complicate the question initially, seems like that was wrong, sorry for that. So, I received single 1099-R in 2026 that stated $14k gross distribution (box 1) and $14k taxable amount (box 2a). These are $7k backdated to 2024 (money transferred in Jan'25) and $7k for regular 2025 contribution (money transferred in Nov'25). As @baldietax  you mentioned, I need to file amended tax return for 2024 to add Form8608, right? Then the question is where the conversion is reported? Is there any specific Form that has to be attached to tax return? How to verify I did this right?

[psobon]

I think I sorted it out. So for 2024 tax return I simply state "Deductions and Credits -> Retirement and Investments -> Traditional and Roth IRA Contributions" (backdated) to add Form-8608-T that will track after-tax contribution to TradIRA. And this will be the difference between the amended and original tax return. Then, for 2025, I will do the same deduction ($7k). Form-8606-T should state $7k 2025 contribution and $7k from previous years (in my case only 2024), after-tax contribution to TradIRA. Then, I will add 1099-R for 2025 tax year that I received from my bank that is purely about distribution from TradIRA. I will state conversion to RothIRA for $14k that happened in 2025 (whole amount, not backdated in any fraction).

And then, per my understanding, because I attach Form-8608-T the TradIRA money is excluded from being taxed again (added to income) as it was taxed already.

That makes sense but it is very hard to understand that and properly input to TurboTax and verify. Thank you @baldietax very very much for all the responses. They were very helpful.

[dmertz]

What makes this difficult to understand is the term "backdoor Roth" which seems to imply that the transactions somehow combine to constitute a single transaction  Once you understand that the nondeductible contribution, which adds to your basis, and your traditional IRA distribution (Roth conversion), which consumes basis, are actually separately reportable transactions (and can occur years apart), it all becomes clear.  The only thing that these transactions have in common is that they require tracking of your basis on Form 8606, which TurboTax does for you.

[baldietax]

yup sounds like you got it - Form 8606 is the key form where this all comes together and calculates the outcome to go on Form 1040 Line 4b so I would review that form (if you see asterisks against some of the amounts on Form 8606 it means a different worksheet is being used which should be in the PDF of your return).