Hi folks- For 2022. our brokerage sent us two 1099-R forms per spouse, one for the majority of the amount put into our trad IRA then converted, the other for a fraction that is paid to the State of Michigan.
Neiother my wife nor I have retirement plans thru work.
Somehow TT desktop (Win10) now asserts the amount converted to the Roth is a simple contribution and not the backdoor roth conversion it is.
Anybody got suggestions how I can make sure those contributions are treated properly by the program? Been using TT for a decade, this is a new problem. Where can I flip/change whatever flag/value I need?
I'll page @dmertz, but you can probably use Forms Mode to make a change (if appropriate).
Mkay... I'm trying to use the forms view and correct things. Why the heck can't my brokerage just send a single 1099-R for the 7000 conversion rather than one of 6,702.72 (what got into the roth) and another for 297.51 that is the tax collected by the State of MI? Probably not the actual cause of my problem but it does not help!
Some things in the question need clarification:
You mentioned "our traditional IRA." I'm guessing that you meant to say "our traditional IRAs" since IRAs are individual IRAs not joint IRAs and because you each received Forms 1099-R, implying that you each had IRA accounts.
You mentioned a backdoor Roth, so I assume that the money that went into the traditional IRAs were a regular nondeductible contributions.
Nothing about these transactions is to be entered as a Roth contribution under Deductions & Credits. These were not regular Roth IRA contributions. Go back and correct the entries you made under Deductions & Credits.
I'm guessing that the reason that you each received two Forms 1099-R is because you are both under age 59½ and the amount that went to pay state tax withholding had to be reported on a code-1 Forms 1099-R separate from a code-2 Forms 1099-R reporting the amounts converted.
Nothing has changed in TurboTax with regard to handling these transactions. When entering the Form 1099s-R that report the Roth conversions, indicate that you moved the money to another retirement account, that you did a combination of rolling over, converting and cashing out, then enter the entire amount in the box for Roth conversion. For the Forms 1099-R that report tax withholding, if you did not substitute other funds to convert this distribution to Roth, indicate that you cashed it out. (It was likely a mistake not to tell the traditional IRA custodian not to withhold the default 4.25% MI tax withholding on the conversion.)
I'm not getting the same errors so I must be making progress. Now I have to figure out the DATE of these events. Somehow I'm missing the docs, and my broker sold its client services to Schwaaaaab so I can't reach out to the original group. And of course, this year being extra s#*t-show=ish, I can't find the forms I sent either. Whine. Arrrrgh. Groan.
😉