Recieved a 1099-R for 2023. Originally, I had contributed to a traditional IRA by mistake, and did an immediate conversion to a Roth IRA immediately. How to not be double-taxed?

[lammerpants]

For 2023, I just received a 1099-R for it because during the year, I accidentally contributed $5000 to an IRA, then converted it right away to a Roth IRA. My tax went up after entering the 1099-R into T-tax for the $5000, even though it's techically after-tax dollars since I not claming a deduction for the traditional IRA that $5000 was in. 

Can someone suggest if/how my next cousre of action would be to avoid paying taxes on that 1099-R? I've read something about filling out form 8606, but it's a little confusing and Turbotax isn't leading me in a clear direction here. 

Thanks!

[fanfare]

Did you hit the CONTINUE button after entering the 1099-R?

[lammerpants]

Hi, yes I went all the way through the flow where it seems like it's ready to file it--except I didn't seem to get any pages or questions that asked or implied about whether my IRA contribution (before it was soon converted) was non-deductible or deductible, so I still have the extra tax added on to my total after adding the 1099-R. 🤔

[fanfare]

To start over, delete the 1099-R

Tell TurboTax you made a contribution of $5,000 to a Traditional IRA, and you elect to make it non-deductible.

Then enter the 1099-R again.

That will put the $5,000 on Line 4a  to make the IRS happy.

Line 4b should be zero.

If it doesn't work, contact TurboTax Support for assistance.

@lammerpants 

[lammerpants]

Yea thanks, I tried that but it didn't work. 

I entered the $5k IRA into Turbotax…my tax owed went up slightly right away for some reason.

I then entered all the info for the IRA, then it told me “Income Too High To Deduct an IRA Contribution”, so forced me into making it non-deductible,  and showed me I’m over the limit of $136k AGI, even though I’m married filing jointly, where that limit is much higher.

I then tried entering my 1099-R that shows my conversion, and it just added more tax even though I’m sure I entered all the questions right.

It's getting hairy, I will try to speak to someone at turbotax. 

[AnnetteB6]

You essentially did a back door Roth IRA conversion.  Here is a TurboTax help article that will take you through this situation step-by-step.  

How do I enter a backdoor Roth IRA conversion?

@lammerpants