Backdoor Roth Conversions getting flagged as "excess contributions"

[sleschuk79]

Hi, the existing instructions on entering a backdoor roth appear out of date with the current set of questions. Each time I enter in my backdoor roth, it gets flagged as an excess contribution. There is a confusing question about recharacterization which I've been leaving blank. In doing a backdoor roth from funds contributed to a Traditional IRA, how do you answer the recharacterization questions?

[dmertz]

A backdoor Roth is a traditional IRA contribution followed by a Roth conversion.  It does not involve a recharacterization of the traditional IRA contribution.  When entering the traditional IRA contribution, answer No when asked if you recharacterized (or "switched") the contribution.

If TurboTax is flagging an excess contribution, either you mistakenly indicated that you did such a recharacterization or you separately entered a Roth IRA contribution.

[sleschuk79]

I backed out all information about recharacterization and double checked that no roth contributions were indicated.  I'm still getting the excess contribution notification.   

I suspect that there is a bug in turbotax software.  The 1099-R functionality was delayed and clearly they don't have it quite right.  The help articles also no longer match the questions you get asked.  I'd hate to move off of turbotax as I've used it for many years, but this might be the last straw.

[baldietax]

A lot of people are inputting 1099R and backdoors already it's likely working fine so I wouldn't jump to conclusion it's a TT issue - it's something to troubleshoot here if you provide more info or screenshots it might help.  I do agree the help article below for backdoor Roth doesn't seem to be updated for the new screens.  Form 8606 is also not finalized for filling not sure the sticking point but I don't think that affects these calcs.

First question just to confirm, do you have "earned" income like a W2?  Otherwise your IRA contribution is not valid and will be flagged as an excess.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...

[PDobie]

I'm having the exact same issue. I make too much to put money in a Traditional IRA so I always do the max in a Traditional and immediately roll it over into a ROTH. The instructions ARE out of date, so it makes it extremely difficult. But I have one question, the answer of which may help to resolve this. When converting from a Traditional to a Roth from the Wages and Income (Personal Income) tab, then IRA Section, and start going through my 1099R entries, I come to a screen that asks: "Tell us if you moved the money through a rollover or a conversion." There are 4 options to choose from. Outdated instructions say choose "I did a combination of rolling over, converting, or cashing out the money." If I do this I get a screen telling me I need to delete my 1099R and enter 2 of them to separate the contributions. However, I've got to believe that I should have been directed to select "I converted some or all of it to a Roth IRA." Would you suggest this is the correct way to do it?

[baldietax]

yes ignore the instructions as the question workflow has changed it used to lead to another set of questions to establish whether you just did a rollover or a combination

for 2025 just use "converted some or all of it to a Roth IRA" option

if you are using desktop looks like Form 8606 was finalized now for filing so make sure to download latest s/w update.

[baldietax]

@GabiU - see above example why the out-dated instructions for backdoor Roth will cause confusion

[Karis_F]

I tested the TurboTax instructions on how to enter a backdoor Roth IRA conversion and it worked as it should. See the following instructions and make sure to follow the steps in order.

How to enter a backdoor Roth IRA conversion

[PDobie]

That’s quite surprising since the desktop instructions you refer to don’t match the questions in this years TT, especially this instruction Part 2, paragraph 8, which reads: 

• Select I did a combination of rolling over, converting, or cashing out the money. Then, enter the full amount in the box next to Amount converted to a Roth IRA account and Continue. 

  
  Not sure why I would select this when I did not do a combination, but converted 100%. When I follow this recommendation, it tells me TT wants to delete my 1099-R and I need to re-enter it twice to separate the “combination” of what I did with it.

[baldietax]

@Karis_F these steps 7/8 for DESKTOP 1099R entry are no longer valid and causing confusion as the screens have changed and there was a similar 'combination' question in the past which didn't behave the same as 2025.

• Select I moved the money to another retirement account (or returned it to the same retirement account) on the What Did You Do With The Money From This Payer? screen.

• Select I did a combination of rolling over, converting, or cashing out the money. Then, enter the full amount in the box next to Amount converted to a Roth IRA account and Continue.

[Karis_F]

Thank you for pointing this out. We are revising the instructions for how to enter a backdoor Roth IRA in TurboTax Desktop.