In 2024 I made non-deductible contributions to my IRA totaling $7,000. In Jan 2025 I made an additional contribution of $1,000 for 2024. Turbotax then asks for my total non-deductible contributions for 2024 and I enter $8,000. Then it wants to know the total contributions made from Jan 1 2025 to April 15th 2025... when I enter $1,000, it treats the $1,000 as taxable and the $7000 as non-taxable... the entire $8,000 should be non-taxable. What am I doing wrong.
Thanks
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@TomDx your 2024 CALENDAR YEAR contributions are only $7,000.
presumably you are 50 or older, so the limit is 8k and your earned income exceeds 8k so there are no complications in terms of the validity of the contribution. so what tax are you referring to, did you use this for a (backdoor) Roth conversion? If so the contribution in calendar year 2025 is not considered as part of your basis for the conversion so I think if you converted 8k only 7k will be considered nontaxable assuming your IRA had no prior basis/balance.
Form 8606 instructions line 4:
https://www.irs.gov/pub/irs-pdf/i8606.pdf
Although the contributions to traditional IRAs for 2024 that you made from January 1, 2025, through April 15, 2025, can be treated as nondeductible, they aren’t included in figuring the nontaxable part of any distributions you received in 2024
Yes over 50.
No prior basis.
I did a backdoor Roth for 7k in 2024 and then a backdoor Roth for 1k in Jan 2025.
Are you saying that I have to pay tax on the 1k that was previously taxed??... because Turbotax is
calculating tax on the 1k when I say the 2024 contribution was done in 2025.
Thanks
Yes. Remove that 1K - you can't add that to the backdoor Roth for 2024. However you can make it part of the backdoor contribution of 7K for 2025. So just remove it from the 2024 return altogether and only roll another 6K over in 2025.
@RobertB4444 but the OP stated he is OVER 50!!! isn't the limit $8,000??? ($7,000 normal plus $1,000 for being over 50).
the $7,000 needs to be entered to reflect the 2024 CALENDAR year contribution and then $1,000 need to be entered to reflect the 2025 CALENDAR yar contribution...the TAX year contribution is $8,000. right????
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