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Level 2
posted May 8, 2020 12:23:16 PM

I did backdoor ROTH IRA post tax contribution. How to fill up 1099-R to make it non taxable?

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3 Replies
Expert Alumni
May 8, 2020 12:59:17 PM

If you are asking how to report a backdoor Roth IRA conversion in TurboTax, see the following article for step by step instructions:

 

How do I enter a backdoor Roth IRA conversion?

 

 

@yogendra-gh

Level 15
May 8, 2020 6:12:22 PM

Making a Non-deductible IRA contribution and Converting to Roth IRA

Many people are doing this as a way of getting around the income limit for making a Roth contribution. But this year's contribution cannot be converted in isolation from any existing traditional (including rollover) IRA(s). It's best explained by example. Let's say you have a $95,000 balance in all your existing traditional IRAs and that balance consist of $45,000 in deductible contributions, $10,000 in previous non-deductible contributions and $40,000 in earnings (interest, dividends & capital gains). This year you make a $5000 non-deductible contribution and convert $5000 to a Roth. Only 15% of the $5000 conversion ($750) will be tax free. Your basis, in all your IRAs, is $15,000 (the previous $10,000 of non-deductible contributions plus this year's $5000 contribution). TurboTax will divide that $15,000 basis by the $100,000 balance ($95K+5K) to arrive at the 15% tax free ratio. This is the way the IRS requires it to be done. The calculations will be shown on form 8606.

Level 2
May 9, 2020 6:53:20 AM

Thank you for giving me the link. This article really helped.