Money contributed to Traditional IRA in 2024 (above Roth limits) and moved to Roth (conversion) prior to 4/15/25. How do I account for that on 2024 taxes?

[mearrf]

Given the contribution happened in 2024 and the conversion happened in 2025 (for 2024 tax year), no 1099-R was generated. Unsure of how to report on 2024 taxes without 1099-R for 2024.

[MindyB]

Since the conversion happened in 2025, you will use the 2025 1099-R (that you will receive at the beginning of next year) to report the conversion.

However, since you made the contribution for the 2024 tax year, you will report that contribution on your 2024 tax return, ensuring Form 8606 shows this nondeductible contribution.

Here are the steps to report the 2024 non-deductible contribution in TurboTax Online, from How do I enter a backdoor Roth IRA conversion?:

"Step 1:  Enter the Non-Deductible Contribution to a Traditional IRA

1. Go to Deductions & Credits
2. On the Your tax break screen, locate and select the Retirement and Investments section, then select Start or Revisit next to Traditional IRA and Roth IRA.
3. On the Traditional IRA and Roth IRA screen, check the Traditional IRA box and select Continue.
4. On the Is This a Repayment of a Retirement Distribution? screen, select No.
5. On the Tell Us How Much You Contributed screen, enter the amount contributed and select Continue.
6. On the Did You Change Your Mind? screen, select No, then answer the questions on the following screens.
7. When you reach the Choose Not to Deduct IRA Contributions screen:
8. Select Yes, make part of my IRA contribution nondeductible.
9. Enter the amount you contributed.
10. If none of your contributions can be deducted, you won't see the option to make part of it nondeductible. Instead, you will see the message Income Too High To Deduct an IRA Contribution, and the full amount of your contribution will automatically be nondeductible.
11. Select Continue.
12. On the Your IRA Deduction Summary screen, review the info and select Continue.

[dmertz]

To be clear, the Roth conversion will be reportable on your 2025 tax return.  Only the traditional IRA contribution goes on your 2024 tax return.

[mearrf]

Thank you. That was the clarification I was seeking and not easliy finding in other threads. I assume that the 2025 return would be able to account for a “double” 1099-R showing 2 years worth of conversions. Allocate the 2024 conversion and then also allocate the 2025 portion? 

[MindyB]

Yes.  You do not need to do any special allocations, TurboTax will help you report this. You'll report the 2025 traditional contribution just like you did for 2024.  

Next year, the 1099-R will arrive, it will report income for the total of 2024 and 2023 contributions converted to a Roth.  On your 2025 return, report this income, then you will indicate that the full amount was rolled into a Roth IRA.  You will be asked to report basis as of 12/31/24 which will be added to the 2025 contributions entered separately. You will not be taxed on this, unless there were earnings above your contributions you converted.

[dmertz]

Roth conversions are done in a particular year, not for a particular year.  With no traditional IRA distributions in 2024, your basis from the nondeductible traditional IRA contribution made for 2024 will carry forward from line 14 of your 2024 Form 8606 to line 2 of your 2025 Form 8606 to be applied when calculating the taxable amount of your 2025 Roth conversion(s).

[mearrf]

Thank you. Given that, just want to make sure I understand completely. 2024 non deductible contribution is accounted for, that money was converted in 2025. If I also fund contributory now (which will also be non deductible) for 2025, and subsequently convert that in a week, the 1099-r for 2025 will show both conversions. On 2025 return, I report the income for both, and then can “offset” both with the basis on file 2024 and in current year 2025 l. That sound right? TYVM

[dmertz]

Essentially, yes.  The contribution made for 2025 will appear on line 1 of Form 8606.  The carryover from line 14 of the 2024 Form 8606 will appear on line 2.  These are summed together on line 3 to be used in the subsequent calculations on Part I of Form 8606 to determine the nontaxable and taxable amounts of the Roth conversions.  If the amount in your traditional IRAs ate the end of 2025, all of the amount on line 3 will be applied to the Roth conversions (assuming no loss in investment value between the time of the contributions and the time of the conversions).