Split year IRA contributions with backdoor Roth and 8606 showing wrong numbers

[Bhantelb]

TLDR.  

I'm having trouble figuring out how to answer the TurboTax wizard questions to make my 8606 fill out correctly.

Based on my description of what I've done below, can you tell me where I went wrong?

Sources guiding me:

The 8606 I'm trying to file in my 2024 return is very close to the one at the bottom of this webpage ("Late Contributions to the Backdoor Roth IRA") as I believe it fits my situation: 

https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/#mistakes

Main difference is that I expect my line 16 will be modestly higher than line 17 (therefore yielding a non-zero line 18) due to interest gained while investments were waiting in traditional IRA before completing conversion to (backdoor) Roth.  This is detailed by the most recent (as of 3/20/25) comment by post4thehills in:

https://www.reddit.com/r/fidelityinvestments/comments/1aj1tdl/excess_roth_ira_contribution_recharact...

Backstory: 

In Jan 2023 I made a 6500 Roth contribution.  In Jan 2024 I realized I was disallowed any 2023 Roth contribution and so withdrew the 2023 Roth contribution plus interest (6792).  Then, still in Jan 2024, I made a traditional IRA (TIRA) contribution on behalf of 2023 for 6499 and promptly converted TIRA to 6499 Roth.  Unfortunately, by that point I had already made a Jan 2024 Roth contribution of 7000 on behalf of 2024 which also was disallowed.  So in June 2024 that Roth contribution plus interest gained (7161) was recharacterized to TIRA, and the TIRA was then converted to Roth along with ~$15 TIRA missed by past conversions for a total of 7174 Roth conversion.

To avoid needing in the future to amend my 2023 return, on my 2023 return I filed a 8606 with lines 1, 3, and 14 equal 6499, and I filed a 5392 for interest on the timely early withdrawal of excess Roth contribution Jan 2024 on behalf of 2023 (line 1 and 3 equal 272 and line 4 equal 27).  

I believe the 2023 return's 8606 should have created a 6499 TIRA basis going into 2024 which should have showed up on the 2024 return's 8606 line 2... but TurboTax shows 0 instead of 6499 on 2024's 8606 line 2. I've tried the good TurboTax instructions on split year contributions here to no avail:

https://thefinancebuff.com/backdoor-roth-turbotax-recharacterize-convert-first-year.html

 I've triple checked my entry of the 3 2024 1009Rs (marked corrected by my custodian but I doubt that matters):

1) The TIRA 1099R of 13673 combines the 2 2024 calendar year TIRA to Roth conversions, the first in Jan 2024 of 6499 on behalf of 2023 and the second in June 2024 of 7174 on behalf of 2024.  TurboTax has appropriately listed that box 7 equals 2, and that boxes are checked in 2b (both boxes) and for IRA/SEP/SIMPLE.  I also checked the next TurboTax page box indicating the full amount of 13673 is a Roth conversion.

2) The Roth 1099R of 6792 in TurboTax has box 2a equal 292 for the taxable interest gained before timely withdrawal of this excess contribution, and has box 7 equal PJ.

3) The Roth 1099R of 7161 in TurboTax has box 2a equal 0  and has box 7 equal N for this 2024 recharacterization.

I also told TurboTax that I made and tracked nondeductible contributions to my IRA, and that my total TIRA basis as of 12/31/23 was 6499.  I told TurboTax that the 12/31/24 total TIRA value was 0 with nothing outstanding.

I've also triple checked my entries in TurboTax retirement deductions and credits:

For TIRA, I've told TurboTax:

1) there were no repayments of retirement distributions.  

2) there were no TIRA contributions for 2024

3) there were no TIRA recharacterization for 2024

4) there were no TIRA excess contributions as of my 2023 tax return

For Roth IRA, I've told TurboTax:

1) I contributed 7000 for 2024

2) I recharacterized that 7000 into TIRA for 2024

3) I have 0 excess contributions for prior years (since I already withdrew timely as of my 2023 tax return - if I enter 6500 here, it tells me I need to pay a 6% fee as if I hadn't already withdrawn it timely)

TurboTax then produces the following 8606 part 1 lines: 

1) 7000 (good) 

2) 0 (was expecting 6499 as TIRA 2023 basis) 

3) 7000 (was expecting 13499 from adding 7000 plus 6499)

5) 7000 (was expecting 13499)

6) blank (good, was expecting 0)

😎 blank (was expecting 13673 as total TIRA converted to Roth in 2024 calendar year, which includes contributions plus interest)

9) blank (was expecting 13673, carrying forward line 😎

10) blank (was expecting 13499/13673)

11) blank (was expecting 13499)

The rest of 8606 part 1 is just math based on earlier 8606 part 1 entries that TurboTax and I disagree on. As a result, TurboTax lists 13 equals 7000, and 14, 15a, and 15c as 0. 

TurboTax also produces the following 8606 part 2 lines:

16) 13673 (good, and surprising since this entry per 8606 instructions is pulled from 8606 line 8 which TurboTax left blank)

17) 7000 (was expecting 13499) 

18) 6673 (was expecting 174)

Interestingly, TurboTax stars 8606 lines 13, 15c, and 18 to say "from taxable IRA worksheet per IRS publication 590-B.

[fanfare]

All these calculation are irrelevant if 2024 Form 8606 Line 2 is zero.

Your first step is to figure out what is needed to populate that line,.

This assumes your 2023 Form 8606 has that desired number on Line 14.

@Bhantelb 

The starred footnote happens because of the way TurboTax handles your situaton.

[DanaB27]

You have to enter the basis from your 2023 form 8606 line 14 when TurboTax asks "Any nondeductible Contributions to your IRA?" at the end of the retirement interview or during the IRA contribution interview.

To enter the nondeductible contribution to the traditional IRA:

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 contribution before this tax year.
9. Enter your basis in the Traditional IRA from your 2023 Form 8606 line 14 (if you had a basis in the prior year)
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).

To enter the Form 1099-R conversion in TurboTax Online: 

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" screen and choose “I converted some or all of it to a Roth IRA”
5. On the "Here's your 1099-R info" 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 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

To enter the 1099-R conversion in TurboTax Desktop: 

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Click "I'll Type it Myself"
6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
7. Click "Continue" and enter the information from your 1099-R
8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
9. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
10. On the "Your 1099-R Entries" screen click "continue"
11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
12. Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

@Bhantelb 

[Bhantelb]

Thanks for your reply @fanfare, I agree.

And yes, 2023 Form 8606 indeed has that desired number on Line 14, 6499.

[Bhantelb]

Hello @DanaB27, I have seen many helpful posts from you here over the years, thank you for replying. 

Unfortunately, completing your recommendations did not change anything.  But I have entered my answers below with "//" next to each of your steps in case they reveal my entries were other than what you expected.  If I do not place a comment about what I entered by one of your lines, it is because I simply implemented your instruction from that line as is.

To enter the nondeductible contribution to the traditional IRA:

Login to your TurboTax Account 

Click on "Search" on the top right and type “IRA contributions” 

Click on “Jump to IRA contributions"

Select “traditional IRA”

Answer “No” to “Is This a Repayment of a Retirement Distribution?”

Enter the amount you contributed. 

//"0"

Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen

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

Enter your basis in the Traditional IRA from your 2023 Form 8606 line 14 (if you had a basis in the prior year)

//"6499"

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).

//"based on what you entered you don't qualify for an IRA deduction" is the screen TurboTax gave me

To enter the Form 1099-R conversion in TurboTax Online: 

Click on "Search" on the top right and type “1099-R”  

Click on “Jump to 1099-R”

Click "Continue" and enter the information from your 1099-R

//Please see my original post for what I entered in this 1099R

Answer questions until you get to “Tell us if you moved the money through a rollover or conversion" screen and choose “I converted some or all of it to a Roth IRA”

On the "Here's your 1099-R info" screen click "Continue"

Answer "Yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.

Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

//"6499"entered for total TIRA basis as of 12/31/23

"0" entered for TIRA value as of 12/31/24, outstanding rollovers, or recharacterizations

Thank you for offering instructions in both TurboTax online and TurboTax desktop.  I only have access to TurboTax online. 

By this point, given your guidance aligns with what I had already entered, and given those both align with what I've gathered from reading online, I am fairly confident this is a technical problem with TurboTax.  In support of this notion, when I searched back through the over 20 times I've printed out a PDF of my 2024 TurboTax return with various attempts at different entries to get it to work, I found a version that in fact had the 8606 populated correctly / as I expected in my first post (I overlooked this because at the time of that earlier version I was focused on getting a different problem fixed).  The fact that I cannot recreate the output from the earlier version makes me wonder if there is some cookie / setting that got created in one of my earlier version attempts that is not possible for me to now go back and unchange via the TurboTax wizard.  I've already sacrificed enough time on this that even completely deleting the 2024 return and starting over might be worth it if there was no other way and the payment I've already made to get TurboTax to print out the 8606 could be carried over.  Any thoughts on this approach or other ideas?

[Bhantelb2]

TLDR: Solution was to create a new TurboTax account and enter everything from scratch. 

Tip: TurboTax refunded the payment I was required to make in order to view from 8606 output on my first account after I called, asked for "tech support"and requested a refund (after spending over 2 hours talking to over half dozen staff and supervisors unable to fix the error).