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Level 2
posted Apr 15, 2022 10:12:37 AM

I made a Roth contribution instead of doing a backdoor Roth for tax year 2020. Now, 2021 Form 1099-R does not show this contribution. How can I fix this?

Here is the chronology:
1. In March 2021, I made a Roth contribution for tax year 2020 for amount X. I wanted to do a backdoor Roth conversion (contribute to Trad. IRA   do a Roth conv.) but alas!
2. Also in March 2021, I correctly did a backdoor Roth conversion for tax year 2021 for the amount Y.
3. While filing 2020 returns, I reported amount X as basis on 2020 Form 8606 (since I assumed I did everything correctly then).
4. 2021 Form 1099-R, Line 1, only shows amount Y, not X   Y as I think it should.

How do I correctly file my return for 2021? How do I fix the wrong basis reflected in 2021 form 1099-R? Please help.

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1 Replies
Expert Alumni
Apr 16, 2022 5:02:20 AM

You will have to correct the 2020 Form 8606 since you do not have the reported basis and you will have to report the Roth contribution. Please see How do I amend my 2020 return?

 

If your income is too high you will have to pay the 6% excess contribution penalty for 2020 and 2021. To avoid the 6% penalty for 2022 you can remove the excess contribution with a regular distribution (without earnings or losses) since it is after the 2020 due date.

 

You can not change the amount on Form 1099-R you only converted amount Y in 2021.

 

 

To enter the nondeductible contribution for 2021 to the traditional IRA and report the excess from 2020 on your 2021 tax return:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions” 
  3. Click on “Jump to IRA contributions"
  4. Select “traditional IRA” and "Roth IRA"
  5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
  6. Enter the amount you contributed to the traditional IRA
  7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “No” since you made a contribution to Roth and not to the traditional IRA
  9. Answer “No” to “Roth contributions”
  10. Continue till the "Enter Excess Contributions" screen enter the total excess contribution from 2020
  11. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

 

To enter the 1099-R conversion: 

 

  1. Click on "Search" on the top right and type “1099-R”  
  2. Click on “Jump to 1099-R”
  3. Click "Continue" and enter the information from your 1099-R
  4. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
  5. On the "Review your 1099-R info" screen click "continue"
  6. Answer "No" to "Any nondeductible Contributions to your IRA?" 
  7. Answer the question about the value of all traditional, SEP, and SIMPLE IRAs