Modified adjusted gross income for Roth IRA purposes

[RWM47]

Using worksheet 2-1 to figure your modified adjusted gross income for Roth IRA purposes you remove any income resulting from the conversion of an IRA to a Roth IRA. When this is done my MAGI allows me to contribute $7000 to a Roth (over the age of 50).

TT is not removing the IRA conversion to a Roth amount in the MAGI calculation. How do I correct this?

[DavidD66]

income resulting from the conversion of an IRA (other than a Roth IRA) to a Roth IRA is subtracted from AGI when calculating Modified AGI for Roth IRA eligibility.  You can still make the contribution, even if TurboTax is saying you can't.  Roth IRA contributions are not reported on your tax return.  TurboTax calculates eligibility, and tracks contributions to Roths, but it is not reported to the IRS as a part of your tax return.  If you are eligible and contribute, you can add it to your ROTH basis in the program next year when you roll over 2022 to 2023.   Be sure there isn't some other reason the program is telling you that you're not eligible.   

[dmertz]

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@DavidD66 wrote:

You can still make the contribution, even if TurboTax is saying you can't.

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TurboTax does not make errors in calculating your MAGI for the purpose of a Roth IRA contribution, provided you have entered everything into TurboTax correctly.  Ignore TurboTax's warning at your peril.  If your entries are correct, TurboTax says the Roth IRA contribution that you have entered is more than permitted and you actually make that contribution, it will be an excess contribution that is subject to penalty every year until the excess is corrected.

It's possible that you have not reported an actual Roth conversion correctly and you need to correct your entry of the Form 1099-R that reports the distribution from the traditional IRA.  Also be aware that if what you actually did was an In-plan Roth Rollover and not a Roth conversion from a traditional IRA to a Roth IRA, it is not permitted to be subtracted from MAGI for the purpose of a Roth IRA contribution.