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Level 2
posted Mar 23, 2025 10:06:57 PM

The software isn't adding my 2024 contribution to IRA to basis, and is treating all amount converted to Roth as taxable. When will this be fixed?

Worksheets and F8606 correctly show 2024 contribution made in 2025 but is not carrying the nontaxable contribution to basis. The taxable portion is treated as nontaxable, and the nontaxable portion is treated as taxable. Bug needs a software fix.

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1 Best answer
Expert Alumni
Mar 24, 2025 5:04:51 AM

If you made a contribution in 2025 for 2024, then you cannot convert this basis in 2024 since it wasn't in your account in 2024. Contributions made in 2025 for 2024 are subtracted from the rest of the basis (see line 5 of Form 8606). 

 

Please review How do I enter a backdoor Roth IRA conversion?

3 Replies
Expert Alumni
Mar 24, 2025 5:04:51 AM

If you made a contribution in 2025 for 2024, then you cannot convert this basis in 2024 since it wasn't in your account in 2024. Contributions made in 2025 for 2024 are subtracted from the rest of the basis (see line 5 of Form 8606). 

 

Please review How do I enter a backdoor Roth IRA conversion?

Level 2
Mar 26, 2025 2:36:51 PM

Thanks.  I make this contribution and conversion every year.  I'd forgotten that 2025's transaction was indeed for 2025 and 2024's was for 2024.

 

I do have to say that Turbotax makes this transaction FAAAAAR more complicated to report than it needs to be and not at all straightforward.  Not sure if this is to encourage people to buy the professional preparation, but as a TAX ATTORNEY, I am well aware of what the rules are and that the non-deductible contribution to the traditional IRA provides basis to convert the contribution tax free, (other than the small amount of interest earned in the days between contribution and conversion).  It is exceedingly frustrating knowing the rules inside and out and still not being able to get what I know is the correct answer popping up on my forms and not being able to identify why.  Yes, it is my own fault for forgetting which year I made which contribution for, and changing that one entry fixed the problem (thank you!) but the whole process of reporting this in the software seems intentionally designed to drive customers to pay for professional prep.  Turbotax was fined this year for misrepresenting the use of software as "free" last year when it wasn't.   This seems like a page out of the same book.  It should not be this complicated.

New Member
Apr 12, 2025 10:32:20 PM

Exactly! TurboTax really needs get it together. Banging my head for ~2 hours. Watching YouTube videos to figure out exact step. As LShaw mentioned, this seems like a classic way to encourage users to buy live support. I think I'll just quit using TurboTax next year to avoid these shady tactics.