I entered my back door conversion from Traditional IRA to ROTH IRA in TurboTax this year (for 2023 tax return) and 8606 form did not seem to be generated correctly. At least, it is generated differently this year compared to previous years when I entered the same info for the back door conversion. On 8606 form, line 5 is empty (0) even though it says "subtract line 4 from line 3" and line 3 has a non-zero amount (line 4 is 0.) Line 13 is also 0 and that's why line 14 (total basis) is overstated. Line 16 and 17 are 0s too. I am not sure what I did wrong. Could you please help me figure it out? When TurboTax asked me how much I transferred (switched or recharacterized) from Traditional IRA to Roth IRA, I entered 0 because it is not a recharacterization, but rather a conversion. Should I clear my settings and start over again? If so, how would I clear the already entered info in TurboTax?
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You should not need to clear the entries you have already made, but you do need to go back through them to review.
You are correct in saying that you did not transfer money from a Traditional IRA to a Roth IRA through recharacterization, so that is not causing the issue.
Use the steps outlined in the following TurboTax help article and be sure that this is the steps that you have followed. It seems like the Traditional IRA contribution may not have been designated to be a non-deductible contribution. This would affect the entries on Form 8606.
How do I enter a backdoor Roth IRA conversion?
Thank you for your quick reply. The problem is that I never get question in step 9: "Did you change your mind?". Instead, I am getting question "Tell us how much you transferred" (how much of a contributed amount I switched or recharacterized to Roth IRA) - I answered 0. It looks like the steps I getting from TurboTax (I am using Home & Business version) do not match the steps in the article you sent me.
And I also don't get question in step 10: "Choose not to deduct IRA contributions"
Never mind. I found the place where I made a mistake. It was #8 in Step 2 (Enter the conversion from a Traditional IRA to a Roth IRA) - I didn't originally select "I did a combination of rolling over, converting, or caching out the money". Once I select it and entered a full amount converted to Roth IRA account, my 8606 form got generated correctly. Thank you again for your help!
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