I started making Backdoor Roth IRA contributions to my Roth IRA last year. Before the tax deadline for 2022, in early April, I made a $7000 after tax contribution to the IRA to be converted into Roth for tax year 2022 and then a $7500 after tax contribution to be converted into Roth for tax year 2023. I got a form 1099R from the IRA declaring both distributions for 2023 as $14,500. When I enter this 1099R In Turbotax I answer the question that I moved money to another retirement account, then that I did a combination of rolling over, converting or cashing out the money, and finally that I converted the full amount ($14,500) to a Roth IRA. When I check 1040 line 4a, IRA distributions, is $14,500 and line 4b, Taxable amount, is $7,000. The $7,000 was a conversion for tax year 2022. I shouldn't owe any taxes. I already paid my taxes on this money and I am using the IRA to Roth conversion allowed. It seems the problem is that I made both contributions in one tax year but this allowed. How do I fix this? Do I need to file an amendment to my 2022 taxes? Even if I do, how does that take care of my 2023 taxes? It seems to me that to do this cleanly the financial institution should give me a 1099R for 2023 showing a distribution of $7,500 and another 1099R for 2022 showing a distribution of $7,000.
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You should have a 2022 Form 8606 with a $7,000 from when you entered the nondeductible contribution on your 2022 tax return. This basis is entered during the interview (steps 9 & 10 during the IRA contribution interview or steps 11 & 12 during the retirement interview).
To enter the nondeductible contribution to the traditional IRA for 2023:
To enter the 1099-R conversion:
You should have a 2022 Form 8606 with a $7,000 from when you entered the nondeductible contribution on your 2022 tax return. This basis is entered during the interview (steps 9 & 10 during the IRA contribution interview or steps 11 & 12 during the retirement interview).
To enter the nondeductible contribution to the traditional IRA for 2023:
To enter the 1099-R conversion:
Thank you DanaB27
I followed your suggestion, unfortunately I got 1040 4b)= $7100 and $7100 for excess contribution to withdraw :(
Seems I did not understand IRA Basis, always confused by those concepts
same here. anyone can help?
Please, make sure that you do not select that you moved the funds to a Roth IRA in the IRA contribution section (this is for recharacterizations). If you converted the funds in 2023 you should have a 2023 Form 1099-R with code 2. You will enter this into TurboTax. If you had a basis on the 2022 Form 8606 line 14 then enter this after you entered all your Form 1099-Rs when TurboTax asks “Any Nondeductible Contributions to Your IRA?”.
Please review the steps here: How do I enter a backdoor Roth IRA conversion?
@jingli Please review the instructions. If you need additional help then please provide more details.
So i have a similiar situation and want to make sure im doing this correctly:
To enter the nondeductible contribution to the traditional IRA for 2023: - I did this part no issues. My contributions were slightly different ($6,000 in 2022 and $6,500 in 2023)
To enter the 1099-R conversion: - My issue with this portion is my 1099-R mentions $12,500. I know i need to fill out a form 8606 for 2022 as I dont believe that was filed in 2022. Even though my 1099-R mentions $12,500 do I enter that into the box 1 and 2A? Then in the step of "What did you do with the money", the amount converted to Roth IRA should be $12,500 again? I wasn't sure in these steps if I needed to change to $6500 instead? Thanks
Yes, you will enter the Form 1099-R as shown and the amount converted should be $12,500.
After you entered all Form 1099-Rs you will need to click continue to enter your $6,000 basis from 2022 when TurboTax asks “Any Nondeductible Contributions to Your IRA?”
"If the 2022 Form 8606 isn't included in your 2022 return, you'll need to fill out a 2022 Form 8606 to record your nondeductible basis for conversion, and mail this form to your designated IRS office. Don’t amend your 2022 return to record your basis.
Note: If you're required to file Form 8606 to report a nondeductible contribution to a traditional IRA, but don’t do so, you’ll be subject to a $50 penalty. This penalty can be waived if you can show reasonable cause." (FAQ)
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