Did backdoor Roth IRA, but didn't receive 1099-R form

[Anonymous]

Did backdoor Roth IRA, but didn't receive 1099-R form. The contribution to my IRA was made for the year 2020, but made this year, 2021. I also completed the backdoor shortly afterwards to convert this into a Roth IRA, in the year 2021 for my 2020 contribution.

Would I still need to wait for the 1099-R form for my 2020 taxes, or would I file this in my 2021 tax forms. 

[npierson7]

Yes, if the contribution was for 2020, the 1099-R should also be for 2020. The main advantage of a backdoor Roth IRA is that you pay taxes upfront on your contributions, and everything after that is tax-free, for you it means you have to pay taxes on the conversion now. Contact your financial institution to make sure how they handled the conversion.  

[dmertz · Accepted solution]

There is no 2020 Form 1099-R to wait for or needed to complete your 2020 tax return.  The traditional IRA contribution for 2020 must be reported on your 2020 tax return on Form 8606.

The Roth conversion performed in 2021 has nothing to do with your 2020 tax return.  The Roth conversion performed in 2021 is reportable on your 2021 tax return.  You'll receive the 2021 Form 1099-R near the end of January 2022, before you file your 2021 tax return.

[mrtreki]

what if i did the conversion after i got my 1099-r?

[JohnW152]

If you made a conversion after you received your 1099-R, then the conversion would be reported in a different tax year.

For example, if you received your 2021 Form 1099-R this year, and converted this year (2022), those are two different reporting periods.  

You’ll report the 1099-R for 2021 on your 2021 return.

You’ll report the conversion on your 2022 return.  You'll get the 2022 Form 1099-R near the end of January 2023, before you file your 2022 tax return.

@mrtreki

[jr911]

Hi - having a somewhat similar issue. In Jan 2022, I deposited $6000 of POST TAX dollars into an IRA, and then immediately converted it to a ROTH IRA account (all on Charles Schwab). I thought that this contribution and rollover would count towards my 2021 tax year. Since I did all of this in Jan 2022, Schwab will not send me any tax documents until Jan 2023, so I have manually entered in 1099R information on TurboTax. I did the following: 

Box 1 Gross Distribution: $6000

Box 2a Taxable Amount: $0

Box 2b:
CHECK: Taxable amount not determined box is checked

CHECKED: Total distribution is checked

Box 7 Distribution Code: 2

CHECKED: IRA/SEP/SIMPLE box is checked

This approach gets form 1040, Line 4a to show $6000 and Line 4b to show $0 as the taxable amount - which is correct. HOWEVER, when going through the final review, TurboTax says that on the 1099R, the Taxable Amount Cannot be ZERO if there is no prior year excess traditional IRA contribution on line 4 of the IRA info worksheet.

I don't know what this means, and I am really at a loss as what to do. This should be a fairly simple backdoor roth conversion. Please help if you can. Thank you!

[dmertz]

The traditional IRA contribution made for 2021 in 2022 must be reported on your 2021 tax return on Form 8606.

Your Roth conversion performed in 2022 will be reported on your 2022 tax return.  Nothing about this Roth conversion goes on your 2021 tax return because the conversion didn't happen in 2021.  Delete the Form 1099-R that you mistakenly entered.

[INGHAOVEASNA9]

what did you end up doing about your issue? i am running into the same exact issue.  Do you only file the 8606 form?

[DanaB27]

Yes, if you made a contribution for 2021 in 2022 and convert it in 2022 then you will only enter the nondeductible contribution on your 2021 return. You will have a 2021 Form 8606 with a basis in line 14 to carry forward to 2022.

To enter the nondeductible contribution to the traditional IRA on your 2021 tax return:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions”
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contributions before this tax year.
9. If you had a basis in the Traditional IRA before then enter the amount.
10. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

Next year on your 2022 tax return please follow these steps to enter the 1099-R distribution/conversion: 

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R
4. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
5. On the "Your 1099-R Entries" screen click "continue"
6. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
7. Answer the questions about the basis from line 14 of your 2020 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

@INGHAOVEASNA9

[jr911]

Thank you! This was also confirmed as the right approach by an outside accountant. Make sure to check your 1040 to ensure that the taxable amount of the IRA contribution is $0. Next year I will fill out form 8606. 

[vignesh]

@DanaB27:  

1. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contributions before this tax year.

I don't see this screen, but I get a message that my IRA is non deductible completely and 8606 will be created automatically. Next year when I receive 1099 R I should step 2 right ?

[DanaB27]

Yes, you will use the conversion instructions next year when you get your Form 1099-R.

The question “Any Nondeductible Contributions to Your IRA?” during the IRA contribution interview only matters if you had a previous nondeductible contribution before 2021 (reported on Form 8606 line 14 in previous years).

@vignesh 

[xrs135]

Hi! So, I'm now on the "next year" portion of this, or the step-2 portion... For 2021, I filed an 8606 carrying forward a basis of $6,000. I finally received the 1099-R, and I'm inputting it into my 2022 taxes, reporting the conversion.

Everything seems good, except for 2022, I was below the Roth IRA income threshold and contributed directly to my Roth IRA. As a result, I'm reporting my 2022 Roth IRA contributions in addition to the backdoor conversion from 2021. Because of this, Turbotax keeps advising me that I'm over contributing. What is the proper way to report the 2021 1099-R conversion AND my regular 2022 Roth IRA contributions?

[dmertz]

In the contributions section of 2022 TurboTax you are to enter only the contribution you made for 2022, not anything related to the contribution you made for 2021.  The Roth conversion is to be entered only via the Form 1099-R that reports the conversion.

Make sure that your 2021 tax return did not report an excess Roth conversion that got transferred into 2022.

[xrs135]

Per these instructions:

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

...I'm supposed to complete step 1 and 2. When I put everything in, including my 2022 Roth IRA contributions, it's showing that I have contributed too much for the year. It's registering the nondeductible (converted) traditional IRA contributions as a 2022 contribution, even though I'm stating it was a prior year conversion? Form 8606 and 1099-R appear to be correct.