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My back-door Roth IRA contributions are showing as $17,615 in distributions, and $5,615 taxable. Why not $0 taxable on the 1040? Isn't the $ already counted in wages?

Distributions are higher than contributions because I also made a 2018 contribution/conversion in calendar year 2019. The contribution was reported on last year's taxes.
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1 Best answer

Accepted Solutions
DanaB27
Employee Tax Expert

My back-door Roth IRA contributions are showing as $17,615 in distributions, and $5,615 taxable. Why not $0 taxable on the 1040? Isn't the $ already counted in wages?

If all of the contributions were non-deductible then make sure you answer the questions about the basis carefully when entering the 1099-R. Pay attention to steps 11 and 12 when entering the contribution, and enter the previous basis/contribution from 2018. Please review these instructions on how to enter the backdoor IRA:

 

 

To enter the nondeductible contribution to the traditional IRA:

  1. Login to your TurboTax Account 
  2. Click "Work on other tax breaks"
  3. Click "Federal" from the left side of your screen
  4. Click “Deductions &Credits” on the top
  5. Scroll down to “Retirement and Investments” and click “Show more
  6. Scroll down to “Traditional and Roth IRA Contributions” and click “Start
  7. Select “traditional IRA
  8. Answer “No” to “Is This a Repayment of a Retirement Distribution?
  9. Enter the amount you contributed
  10. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  11. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes
  12. If you had a basis in the Traditional IRA before then enter the amount.
  13. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

 

 

To enter the 1099-R distribution/conversion: 

  1. Click "Federal" from the left side of your screen
  2. Scroll down to “Retirement Plans and Social Security” and click “Show more
  3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan Withdrawals (1099-R)
  4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
  5. Click "I'll Type it Myself"
  6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
  7. Click "Continue" and enter the information from your 1099-R
  8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account
  9. Then choose “I converted all of this money to a Roth IRA account.”
  10. On the "Your 1099-R Entries" screen click "continue"
  11. Answer "yes" to "Any nondeductible Contributions to your IRA?"
  12. Answer the questions about the basis
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

2 Replies
DanaB27
Employee Tax Expert

My back-door Roth IRA contributions are showing as $17,615 in distributions, and $5,615 taxable. Why not $0 taxable on the 1040? Isn't the $ already counted in wages?

If all of the contributions were non-deductible then make sure you answer the questions about the basis carefully when entering the 1099-R. Pay attention to steps 11 and 12 when entering the contribution, and enter the previous basis/contribution from 2018. Please review these instructions on how to enter the backdoor IRA:

 

 

To enter the nondeductible contribution to the traditional IRA:

  1. Login to your TurboTax Account 
  2. Click "Work on other tax breaks"
  3. Click "Federal" from the left side of your screen
  4. Click “Deductions &Credits” on the top
  5. Scroll down to “Retirement and Investments” and click “Show more
  6. Scroll down to “Traditional and Roth IRA Contributions” and click “Start
  7. Select “traditional IRA
  8. Answer “No” to “Is This a Repayment of a Retirement Distribution?
  9. Enter the amount you contributed
  10. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  11. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes
  12. If you had a basis in the Traditional IRA before then enter the amount.
  13. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

 

 

To enter the 1099-R distribution/conversion: 

  1. Click "Federal" from the left side of your screen
  2. Scroll down to “Retirement Plans and Social Security” and click “Show more
  3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan Withdrawals (1099-R)
  4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
  5. Click "I'll Type it Myself"
  6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
  7. Click "Continue" and enter the information from your 1099-R
  8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account
  9. Then choose “I converted all of this money to a Roth IRA account.”
  10. On the "Your 1099-R Entries" screen click "continue"
  11. Answer "yes" to "Any nondeductible Contributions to your IRA?"
  12. Answer the questions about the basis
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

My back-door Roth IRA contributions are showing as $17,615 in distributions, and $5,615 taxable. Why not $0 taxable on the 1040? Isn't the $ already counted in wages?

Thank you! I didn't realize that my prior year contribution was the "basis" it was asking me about. Your solution just saved me $1,000!

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