I made contributions for both 2019 and 2020 for my traditional ira during 2020. When I try to enter the form, it won't accept as more than yearly limit. how do I fix?

[mmezzone]

When I run review at the end, it just keeps erroring out as I didn't select for it to tax me on the overage.

[DanaB27]

You will need to enter contribution for 2019 on your 2019 tax return even if you paid it in 2020 before the due date of the 2019 tax return.

Only enter the contribution for 2020 on your 2020 tax return. 

Please review your entry:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “IRA contributions”
3. Click on “Jump to IRA contributions"

Please see How do I amend a 2019 return in TurboTax? for additional information.

[mmezzone]

Thank you, but I guess I am more confused now. Fidelity put all the funds on my 2020 1098R for both years, I can't just enter less on the form than what they put on the form they send to the IRS.  Did they send me an incorrect 1098r?

[PattiF]

If IRA contributions for 2019 and 2020 were made in 2020, there should be two 1099-R forms from Fidelity. The 1099-R for 2019 would be entered on the 2019 return. The deadline to contribute to the 2019 IRA was July 15, 2020. If you made the contribution by the deadline it should have been credited to the 2019 tax year. Check you initial paperwork from the contributions and contact Fidelity. You would need to have corrected 1099-Rs sent to you.

[macuser_22]

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@PattiF wrote:

If IRA contributions for 2019 and 2020 were made in 2020, there should be two 1099-R forms from Fidelity. The 1099-R for 2019 would be entered on the 2019 return. The deadline to contribute to the 2019 IRA was July 15, 2020. If you made the contribution by the deadline it should have been credited to the 2019 tax year. Check you initial paperwork from the contributions and contact Fidelity. You would need to have corrected 1099-Rs sent to you.

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1099-R's report *distributions* not contributions.   Contributions  will be reported on a 5498 form that is information and does not go on a tax return.     Any 2019 contribution  made *in* 2020 *for* 2019 before the 2019 due date can ONLY be reported on a 2019 tax return which might require amending 2019 if not already reported.  It does NOT go on a 2020 tax return.

[mmezzone]

Thank you for that clarification. Maybe I am asking the question wrong. When I run the review check, it keeps coming back to that form saying I have completed it wrong. Another post had suggested I should change the amount in box  2a to zero, as the full funds were moved from my traditional ira to a roth ira as a back door. It will not let me get past the audit check as is. What am I doing wrong? It taxes me on the funds if I don't move that to zero.  (tried to add screen shot, but won't let me. Box 2a in the 1098r was updated to zero.)

[Opus 17]

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@mmezzone wrote:

Thank you for that clarification. Maybe I am asking the question wrong. When I run the review check, it keeps coming back to that form saying I have completed it wrong. Another post had suggested I should change the amount in box  2a to zero, as the full funds were moved from my traditional ira to a roth ira as a back door. It will not let me get past the audit check as is. What am I doing wrong? It taxes me on the funds if I don't move that to zero.  (tried to add screen shot, but won't let me. Box 2a in the 1098r was updated to zero.)

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A rollover is not a contribution.  Please describe exactly what you did and what forms you are trying to enter. 

[mmezzone]

In 2020, I made contributions for both 2019 and 2020, to catch myself up for both years. (2019 contributions were made prior to 4/15/20) During 2020, I rolled all the contributions made for both years from the traditional ira, to the roth ira. I think those two issues combined are what are giving me the problem. The 1098r lists 10,494.28 on it for all the contributions. Fidelity listed distribution code 2 and checked boxes taxable amt not determined, total distribution, and ira/sep/simple. When I entered the form, they have both 10494.28 in both box 1 and 2. As a result, it is taxing me for the full amount. Based on another section I read, i changed box 2 to zero, and that is causing the issue when it goes through review check. What should I change about how I entered?

[Opus 17 · Accepted solution]

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@mmezzone wrote:

In 2020, I made contributions for both 2019 and 2020, to catch myself up for both years. (2019 contributions were made prior to 4/15/20) During 2020, I rolled all the contributions made for both years from the traditional ira, to the roth ira. I think those two issues combined are what are giving me the problem. The 1098r lists 10,494.28 on it for all the contributions. Fidelity listed distribution code 2 and checked boxes taxable amt not determined, total distribution, and ira/sep/simple. When I entered the form, they have both 10494.28 in both box 1 and 2. As a result, it is taxing me for the full amount. Based on another section I read, i changed box 2 to zero, and that is causing the issue when it goes through review check. What should I change about how I entered?

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OK, Step 1.  On your 2020 tax return, you only list contributions made for tax year 2020.  Contributions made for tax year 2019, must be listed on your 2019 return only, even if the date of the contribution was in 2020.  Such contributions could only be made prior to the due date of your tax return (July 1, 2020 for most people) and you would have to inform the IRA trustee that this was a 2019 contribution at the time it was made.

You may need to amend your 2019 return if you did not report your contributions made in 2020 but for 2019 on your 2019 return. 

Then, Step 2.  You withdrew all the funds and rolled them over into a Roth IRA (backdoor conversion).  Enter the 1099-R exactly as it is shown, don't change the boxes.  The entire amount of the rollover (contributions plus earnings) will be taxable to you on your 2020 return.  When entering the 1099-R there is a question of what did you do with the money and the choices are "rollover" and "a combination of things."  Choose a combination of things, and then answer that it was a Roth conversion in the next box.  (The choice "rollover" to that question only means a rollover to another pre-tax traditional IRA, and the question could probably be worded better.)

[macuser_22]

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@mmezzone wrote:

In 2020, I made contributions for both 2019 and 2020, to catch myself up for both years. (2019 contributions were made prior to 4/15/20) During 2020, I rolled all the contributions made for both years from the traditional ira, to the roth ira. I think those two issues combined are what are giving me the problem. The 1098r lists 10,494.28 on it for all the contributions. Fidelity listed distribution code 2 and checked boxes taxable amt not determined, total distribution, and ira/sep/simple. When I entered the form, they have both 10494.28 in both box 1 and 2. As a result, it is taxing me for the full amount. Based on another section I read, i changed box 2 to zero, and that is causing the issue when it goes through review check. What should I change about how I entered?

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First there is not such form as a "1098r" - do you mean a 1099-R?

It sounds like you are trying to do what is known as a "backdoor Roth".

There are two issues here.    As said above any IRA contribution*for* 2019 regardless of which yer it was contribution can ONLy be reported on a 2019 tax return.     Since you seem concerned that you are being taxes on the full amount then I am assuming that the 2019 and 2020 contributions were not deducted and were intended to by non-deductible basis that can offset the tax on a Roth conversion.

For that to happen the 2020 IRA contribution must be entered in the 2020 IRA contribution section and marked as non-deductible and will create a 2020 8606 form with the non-deductible contribution on line1.

You should have done the same thing on your 2019 tax return and have a 2019 8606 form with the 2019 contribution on lines 1, 3 and 14.

If yiu did not file a 2019 8606 then until you do you are not allowed to use it to offset the tax on a distribution.

You can amend 2019 to include the non-deductible contribution and report the 8606.

Enter your 2020 1099-R this way:

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

You will be asked of you had and tracked non-deductible contributions - say yes. The enter the amount from the last filed 8606 form line 14 if it did not transfer. Then enter the total value of any Traditional, SEP and SIMPLE IRA accounts that existed on December 31, 2020.

That will produce a new 8606 form with the taxable amount calculated on lines 6-15 and the remaining carry-forward basis on line 14.

NOTE: If there is an * next to line 15 then 6-15 will be blank and the calculations will be on the "Taxable IRA Distributions worksheet instead.

[Opus 17]

I don't think it is clear yet if these were non-deductible contributions, but that is an extra point to be looked at if they were.