Backdoor roth issue

[nkg2duke]

I made a 2017 tax year and 2018 tax year IRA and then backdoor in the year 2018. 1099R is for 2018 shows $11,000.  Turbotax is giving error and says I have excess contribution and owe tax and 6% penalty.  I have seen all the links and posts and followed directions, but it does not work.  Any guidance?

[DanaB]

Just to verify, in the Deduction & credit section, under traditional IRA contribution you only entered the 2018 nondeductible traditional IRA contribution of $5,500 but no other contributions, correct? And then you entered the 1099-R with the $11,000 distribution/conversion and answered the questions in TurboTax?

[nkg2duke]

Yes, I entered this; however, when I import the 1099-R from Fidelity, it does not give me the option to answer the distribution/conversion option.

[nkg2duke]

Under deductions  section, entered the 2018 nondeductible traditional IRA contribution of $5,500.
You said manually enter the 1099-R with the $11,000 distribution/conversion. Will my manual entered 1099R be exact copy of 1099R received from Fidelity? If not what will be differences? Please clarify?

[DanaB]

Yes, under the deduction section enter the 2018 nondeductible traditional IRA contribution of $5,500.  
Yes, you would enter the 1099-R exactly as shown on the 1099-R. But the questions after you entered the 1099-R are important especially entering the basis. I will post the detailed instructions below. Please let me know if you have any other questions.

[nkg2duke]

thank you, it worked, I appreciate it!

[DanaB]

Please use the following instructions to enter a "Backdoor IRA" to ensure it is calculated correctly in TurboTax:

To enter the nondeductible contribution to the traditional IRA:

1. Open your return
2. Click on “Federal Taxes” on the top
3. Click “Deductions &Credits” on the top
4. Click "I'll choose what to work on"
5. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
6. Select “traditional IRA”
7. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
8. Enter the amount you contributed
9. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
10. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes”
11. If you had a basis in the Traditional IRA before then enter the amount.
12. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

To enter the 1099-R distribution/conversion: 

1. Click "Wages & Income" on the top
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 converted all of this money 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?"
12. Answer the questions about the basis

[nkg2duke]

thank you, it worked, I appreciate it!

[DanaB]

You are welcome!

[dt191919]

Thank you!