How to convert *DEDUCTIBLE* IRA to Roth

[Maximillion]

I have an old IRA funded with pretax dollars (from 20 years ago).  I would like to convert some of it to a Roth.  I was told that the backdoor Roth process can accomplish this, but every suggestion only relates to new NON-DEDUCTIBLE  IRA contributions which are immediately converted to a Roth.  My situation is different since I am starting with IRA funds which are pre-tax dollars. 

When I try to follow the "non-deductible IRA to Roth" instructions, I always wind up with an excess contribution penalty. I know that I will have to pay basic income tax on my IRA withdrawal, but I am not expecting the excess penalty.

I have been trying to figure this out and in the process, I have created 10 different returns and in each one, I try to adjust my Roth contribution answers in some tiny way to try to find the magic combination, but no luck. Always, I get the 6% penalty for excess contribution.   I felt sure that it is possible to convert a deductible IRA to a Roth without penalty, but I can't figure out how.  I also can't find a TT community answer for this exact situation.

As a little background, yes, I entered the Roth conversion in the "deductions & credits" section of TT first, and THEN I entered the 1099-R information in the "Wages and income" section. 

Does anyone have any suggestions?

[dmertz · Accepted solution]

A Roth conversion is not a regular Roth IRA contribution.  Remove any entry you made under Deductions & Credits regarding the conversion, it doesn't belong there at all.  You simply enter the Form 1099-R that reports the distribution from the traditional IRA, indicate that you moved the money to another retirement account, indicate that you did a combination of rolling over, converting and cashing out (even though you may have converted the entire amount), then indicate the amount converted to Roth.  TurboTax will prepare Form 8606 Part II for the Roth conversion and will include the taxable amount (the entire amount since you have no basis in nondeductible traditional IRA contributions) on Form 1040 line 4b.

[Maximillion]

Thank you!!!  That seemed to be the answer!