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Level 1
posted Apr 23, 2021 7:20:45 AM

Making a Backdoor ROTH IRA contribution for tax year 2020, contribution made in 2021

Hello,

 

I am planning on making a backdoor  Roth IRA contribution for tax year 2020 taking advantage of the extended tax filling date. This contribution would be made right now, April/May 2021. My two questions here are:

 

- Does the 2020 tax filling extension also applies to contributions that can be made to a ROTH IRA for the 2020 year?

- How to report this event? Would I need to report a contribution to a Traditional IRA account when filling my 2020 taxes, and then next year report the conversion when filling for tax year 2021?

0 1 487
1 Replies
Expert Alumni
Apr 24, 2021 7:11:10 AM

Yes, you have until May 17th to make IRA contributions for 2020.

 

Yes, you will report the IRA contribution on your 2020 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”
  5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
  6. Enter the amount you contributed
  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 “Yes” if you had a nondeductible contributions before this tax year.
  9. If you had a basis in the Traditional IRA before then enter the amount.
  10. 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 and you only get a screen saying $0 is deductible).

 

On your 2021 tax return you will enter the conversion:

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “1099-R”
  3. Click on “Jump to 1099-R”
  4. Click "Continue" and enter the information from your 1099-R
  5. 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”
  6. On the "Your 1099-R Entries" screen click "continue"
  7. Answer "yes" to "Any nondeductible Contributions to your IRA?" since you had any nondeductible contributions in 2020.
  8. Answer the questions about the basis and value