Turbotax Online 2023 Backdoor Roth contribution made in 2024 appearing as taxable in my 2024 return. Help!!

[tinsone]

In 2024, we had a 2023 backdoor Roth contribution and a 2024 backdoor Roth contribution. For the 2023 tax filing we submitted our form 8606 for $14,000 total ($6500 for my wife, $7500 for me). Both the 2023 contribution and the 2024 contribution are appearing on our form 1099-R, as expected.

But after following all of the instructions step by step, our 2024 Form 1040 isn't correct. Line 4b should be $0. But instead it's showing the $14,000 and says ROLLOVER. This is incorrect. And the result is it's showing that we owe thousands of dollars that we should not owe. Is there a trick I'm missing? Is there a problem with the Online tool? I've now been working on this for 5 hours, have deleted forms and reloaded, have read a dozen online articles. I need help. Extremely frustrated.

[AnnetteB6]

Be sure that when you are answering the follow-up questions after entering the Form 1099-R for the distribution from your Traditional IRA (that was converted to your Roth IRA) that you did not indicate that the money was rolled over to another retirement account.  If you see a question asking if it was rolled over, be sure to select the other choice.  Then you should see an option to specify that the money was converted to a Roth IRA.

Also, you should check the distribution code shown on your Form 1099-R to be sure that it does not indicate a direct rollover.  If it does, then you may need to contact the issuing company for further explanation or a corrected Form 1099-R.  

Here are a couple of TurboTax help articles that may give you more guidance:

What do all the codes in Box 7 of the 1099-R mean?

How do I enter a backdoor Roth IRA conversion?

 

[tinsone]

Hi Annette,

I eventually figured it out. What was happening was that I needed to set my prior year baseline at the $14K, instead of $0. When I did that, everything ran appropriately. TurboTax needs to make that clearer in its instructions. I found it fishing around a blog post from an accountant who had emphasized that point. 

Thanks for your assistance. I appreciate it. Hopefully this helps someone else, too.