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Level 1
posted Feb 26, 2023 8:56:59 PM

Turbotax incorrectly showing an excess roth contribution

To boil it down, I'm worried I'm going to be double-taxed.

 

My 1099-R shows $12,000 in taxable amount for 2022. (But it also checked off Box 2b - taxable amount not determined.)

 

What I did in 2022:

- Contributed $12,000 to my IRA before the Apr 2022 tax deadline - $6K for 2021 and $6K for 2022. (I forgot to contribute in the 2021 calendar year, but it's allowable until the '22 tax deadline.)

- Immediately did a roth conversion on the $12K (aka. back door)

- The $6k for 2021 WAS reported in my 2021 taxes.

 

Now, doing 2022, I'm entering a $6K contribution, with a $12K basis (based on my research)... but Turbotax is saying I have a $6K excess contribution. What am I doing wrong??!

0 2 249
2 Replies
Level 1
Feb 26, 2023 9:45:06 PM

Not sure what I did but that "excess roth contribution" has gone away! i think I had to go back and enter my income correctly for the 1099 portion. 

 

I'm still wondering if I entered my tax basis correctly... if anyone can help answer that. Is $12K correct? 

Expert Alumni
Feb 27, 2023 5:03:06 AM

Yes, don’t enter Form 1099-R as a Roth contribution otherwise you will get an excess contribution message.

 

No, your prior year's basis will be $6,000 when TurboTax asks. You should have entered the nondeductible contribution on your 2021 return and have a 2021 Form 8606 with a $6,000 basis on line 14. This will be entered on your 2022 tax return.

 

Please review the steps below:

 

To enter the nondeductible contribution to the traditional IRA:

 

  1. Open your return
  2. Click “Deductions &Credits” on the top
  3. Click "I'll choose what to work on"
  4. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
  5. Select “traditional IRA”
  6. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
  7. Enter the amount you contributed for 2022 $6,000
  8. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  9. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” since you had nondeductible contributions before this tax year
  10. Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 ($6,000)
  11. 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 1099-R conversion: 

 

  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 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs