I contributed to a Roth IRA in/for 2019, I then recharacterized the cont+gains to a trad. IRA (non-deductible). Then I converted that total to a roth IRA. How do I enter

[jballard650]

I contributed $6000 to a Roth IRA in/for 2019, I then recharacterized the cont+gains ($6829) to a trad. IRA (non-deductible). lastly a I converted that total (now $6960) to a roth IRA. I filled out the 8606 manually and think that my taxable amount from part II is $960. How do i get turbo tax to get the correct taxable amount and also fill out the 8606 correctly?

I got two w-2's from Vanguard:
(1) for the recharization showing no taxable amount  and a "N" in box 7
and  (2) for the conversion showing $6,960 in box 1 and 2a as a taxable amount but with the taxable amount not determined box checked along with the total distribution and IRA box also checked. There is a code "02" in box 7.

I've tried going through the 8606 turbotax questions but cant seem to get the right result. one thing I could do is to just change the 2nd W-2 taxable amount to $960 but then turbotax won't do the 8606.

I have also under the 1099-R for the tIRA section selected that I converted all of this money to a Roth IRA account.

[macuser_22]

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@jballard650 wrote:

I contributed $6000 to a Roth IRA in/for 2019, I then recharacterized the cont+gains ($6829) to a trad. IRA (non-deductible). lastly a I converted that total (now $6960) to a roth IRA. I filled out the 8606 manually and think that my taxable amount from part II is $960. How do i get turbo tax to get the correct taxable amount and also fill out the 8606 correctly?

I got two w-2's from Vanguard:
(1) for the recharization showing no taxable amount  and a "N" in box 7
and  (2) for the conversion showing $6,960 in box 1 and 2a as a taxable amount but with the taxable amount not determined box checked along with the total distribution and IRA box also checked. There is a code "02" in box 7.

I've tried going through the 8606 turbotax questions but cant seem to get the right result. one thing I could do is to just change the 2nd W-2 taxable amount to $960 but then turbotax won't do the 8606.

I have also under the 1099-R for the tIRA section selected that I converted all of this money to a Roth IRA account.

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First delete the 1099-R and 8606.  Don't try to do this manually.

Before entering the 1099-R, enter the recharacterization.  The code N 1099-R will not do anything when entered.

The proper way to report the recharacterization and earnings which is to enter the 2019 IRA contribution in the IRA contribution interview section and then say yes to "Did you switch from a Roth to a Traditional IRA - recharacterize".

The amount of the original Roth contribution must be entered - not any earnings or losses.

Then TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharactorized.

There is no tax or penalty on the before-tax earnings since the earning were simply switched into the recharactorized account.

That is the only way to prepare and attach the proper explanation statement for a code N 1099-R.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

Since the after-tax Roth contribution is now a Traditional IRA contribution it can be either a before-tax deduction if your MAGI allows a deduction which might result in an additional 2019 refund, or it will be an after-tax contribution reported on a 8606 form (line 1 & 14) as a "basis" in the Traditional IRA that will reduce the tax of future distributions.  If doing a backdoor Roth be sure that it is marked non-deductible.

There is a TurboTax bug that will not ask the total 2019 year end value of ALL Traditional, SEP and SIMPLE IRA accounts that existed.  If that value is zero then the boy will not affect you, and for a back-door Roth to work it should be zero anyway.

Enter the 1099-R with the code 2 this way:

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

You will be asked of you had and tracked non-deductible contributions - say yes. The enter the amount from the last filed 8606 form line 14 if it did not transfer. Then enter the total value of any Traditional, SEP and SIMPLE IRA accounts that existed on December 31, 2019.

That will produce a new 8606 form with the taxable amount calculated on lines 6-15 and the remaining carry-forward basis on line 14.

If done properly the 8606 should have the recharactorized amount on line 1, the converted amount on line 8 and the taxable amount on line 18.    NOTE: if there is a * (asterisk) next to line 15  then the 8606 line 6-15 calculations are  done on a "Taxable IRA Distribution Worksheet" instead of the 8606.