topic Re: Backdoor Roth Conversion in Get your taxes done using TurboTax

Backdoor Roth Conversion

state-taxes — Tue, 10 Feb 2026 09:01:52 GMT

How do I handle the following situation:
Earlier in 2023, I did a backdoor roth conversion from traditional IRA for the prior year (2022) which was $6k.

Later in 2023, I did a backdoor roth conversion from traditional IRA for the current year (2023) which was $6.5k.

My 1099 R for my traditional IRA then shows 12.5k.

How can I correctly enter this + record it as a backdoor roth conversion. I've tried adding the 1099 -R form, but my federal taxes are going up each time so I believe I am doing something incorrectly.

Thank you!

Re: Backdoor Roth Conversion

dmertz — Wed, 31 Jan 2024 14:37:35 GMT

The 2022 traditional IRA contribution was required to have been reported on your 2022 tax return, on Form 8606 line 1 if nondeductible. Line 14 of your 2022 From 8606 carries forward to line 2 of your 2023 Form 8606 to be added to your 2023 nondeductible traditional IRA contribution shown on line 1. Be sure to enter your 2023 traditional IRA contribution under Deductions & Credits and do not indicate that you switched (recharacterized) your contribution to be a Roth IRA contribution. You converted to Roth, you did not recharacterize to Roth.

Re: Backdoor Roth Conversion

state-taxes — Wed, 31 Jan 2024 15:29:16 GMT

My 2022 traditional IRA contribution was reported on my 2022 8606.

Is it showing up on my 1099 R for this year as well because I did a past year contribution for 2022?

Once entering the 2023 traditional IRA contribution, how do I go about recording it as a roth conversion?

Thanks

Re: Backdoor Roth Conversion

dmertz — Wed, 31 Jan 2024 16:44:18 GMT

The Roth conversion is indicated by entering the From 1099-R that reports the distribution from the traditional IRA, indicating that you moved the money to another retirement account, that you did a combination of rolling over, converting and cashing out, then entering the amount that was converted to Roth.

Re: Backdoor Roth Conversion

AmyC — Wed, 31 Jan 2024 16:59:41 GMT

Yes, since you made the 2022 contribution in 2023, you received a tax form related to your 2023 actions. Since you already accounted for it on your 2022 return, you should be good.

Re: Backdoor Roth Conversion

state-taxes — Wed, 31 Jan 2024 18:16:43 GMT

Would that be a 1099 R for my traditional IRA or a 1099 R for my roth IRA?

Re: Backdoor Roth Conversion

dmertz — Wed, 31 Jan 2024 18:28:45 GMT

A Roth conversion is a distribution from the traditional IRA that requires a Form 1099-R from the traditional IRA.

Re: Backdoor Roth Conversion

state-taxes — Thu, 01 Feb 2024 15:52:44 GMT

After entering my tIRA contributions and the roth conversion, turbotax is still adding 6k to my income and taxing me on it (which is incorrect).

Could this be because my total basis on my 8606 from last year is 0? (I don't quite understand what that means, but I can tell that my last year tax return had the roth backdoor correctly recorded, not sure if the 8606 is correctly reflecting that or not)

Would love to hear any advice, thanks

Re: Backdoor Roth Conversion

DaveF1006 — Thu, 01 Feb 2024 17:26:29 GMT

Check line 20 on Schedule 1 to see if there is an IRA deduction amount listed there. If there is then the $6k is added back as income. if blank, then there should be no added income to report in your return. Please read this Turbo Tax link to make sure you have recorded your full conversion correctly. Don't miss a step or deviate from the instruction.

Your current 8606 should reflect the basis of the previous year's Roth conversion if you did a Backdoor Roth for year 2022. If not, then you will need to amend your 2022 to reflect the amount of the contribution so that you will the correct basis going forward. You will also need to report this year's Roth contribution on your 8606. Here is how to report the 8606. As an FYI, Turbo Tax do not generate 8606's automatically. You need to do this on your own.

Sign in to your TurboTax account.
Open your return, if it isn't already open.
Inside TurboTax, search for this exact phrase: IRA Contribution Information.
Select the Jump to link in the search results.
Proceed through the IRA section, answering questions as you go.
Answer Yes when you reach the screen, Any Nondeductible Contributions to Your IRA?
Select Continue.
We'll generate and fill out the 8606 behind the scenes.

I would suggest that you amend your 2022 return first so that the Basis is properly reported and then report your 2023 contribution. This way when you add this year's contribution, the basis amount will be shown as $12,000 instead of $6000. Tracking your basis is important and used as a tool when you begin taking retirement distributions especially if you have a mix of deductible and non-deductible retirement distributions. To amend 2022.

To amend your return using Turbo Tax Online.

Log into Turbo Tax
Select Scroll down Your tax returns & documents in your landing page.
Select Amend (change) 2022 return.

To amend using the 2022 Desktop Software, go to:

Federal Taxes
Other Tax Situations>other tax forms
Amend a return

Re: Backdoor Roth Conversion

state-taxes — Thu, 01 Feb 2024 19:07:28 GMT

So I checked line 20 on my schedule 1, and it is blank. However, on line 4a of my 1040, my IRA distributions are listed at $12,500, and 4b has taxable amount of $6000. It looks like it removed my $6500 roth conversion from the taxable amount but is still leaving me with the taxable amount of $6000 for my last year conversion.

Is this because my 8606 from last year has a value of 0 for total basis, and is not recording my roth conversion?

Re: Backdoor Roth Conversion

DaveF1006 — Thu, 01 Feb 2024 19:41:02 GMT

To clarify, was your 1099R reported as $12,500 for 2023?

Re: Backdoor Roth Conversion

state-taxes — Thu, 01 Feb 2024 21:08:34 GMT

Yes, it looks like it is including the contribution I made for 2022 (in early 2023) which $6k. And then for 2023, it was $6.5k

Re: Backdoor Roth Conversion

state-taxes — Mon, 05 Feb 2024 16:21:20 GMT

Would love to hear any additional thoughts on this if possible.

Thank you

Re: Backdoor Roth Conversion

DianeW777 — Mon, 05 Feb 2024 17:13:39 GMT

The 2022 Form 8606 line 14 should be $6,000 and this needs to be entered during the 2023 interview:

On the "Review your 1099-R info" screen click "Continue"
Answer "yes" to "Any nondeductible Contributions to your IRA?" since you had any nondeductible contributions in prior years.
Answer the questions about the basis from line 14 of your 2022 Form 8606 (should be $6,000 if you reported it correctly on your 2022 return) and the value of all traditional, SEP, and SIMPLE IRAs.

Please note the Backdoor Roth only works if all your traditional/SEP/SIMPLE IRAs are empty (value is $0 at the end of the year). Otherwise, the pro-rata rule applies. This means that with each distribution/ conversion you will have a taxable and nontaxable part.

Form 8606 Instructions

Re: Backdoor Roth Conversion

state-taxes — Mon, 05 Feb 2024 17:35:15 GMT

So, it sounds like based on my case, I didn't enter it correctly in my 2022 return and should amend that prior to finishing up my 2023 taxes.

Is that correct?

Thank you

Re: Backdoor Roth Conversion

DianeW777 — Mon, 05 Feb 2024 20:19:35 GMT

Before you amend, double check your Form 8606 to see if there is a cost basis listed on Line 14. Review the three actions below to decide if you need to do any of them for 2022.

If this cost basis occurred in a year earlier than 2022, and it was simply not entered on the 2022 return, and assuming there were no nondeductible contributions actually made in 2022, then an amendment is not necessary.
If you should have filed one with your return in 2022, but failed to do so, or did not complete it correctly, you can file Form 8606 as a stand alone form. It is a signature form and can be filed alone. This eliminates a need to amend the entire tax return.
If your Form 8606 was filed in 2022 and it is correct, simply use the information to complete 2023.

A Form 8606 is not always required, specifically, in a year when there were no nondeductible contributions or any withdrawals. The suggestion is to file it every year so that your cost basis is not lost but always current so that you can find it easily.

@state-taxes

Re: Backdoor Roth Conversion

state-taxes — Mon, 05 Feb 2024 23:06:20 GMT

Hmm ok, could you help me with this particular case.

In 2021 - no contributions/conversions in this year, I did it in 2022. Only received a 5498 for 2021, no 1099-R for the conversion

In 2022 - contributed to traditional + converted to Roth for prior year (didn't take care of this in my 2021 return, is that ok?)
In 2023 - Contributed to traditional (for prior year - 2022 and current year - 2023) and converted 12.5k to Roth.

My 8606 form in 2022 has a total basis of 0, did I do that correctly, or I'm assuming I didn't and it needs to have a basis of 6k.

Thank you!

Re: Backdoor Roth Conversion

DianeW777 — Tue, 06 Feb 2024 14:21:22 GMT

No, you did not do the 2022 correctly.

Yes, you would have had a basis in 2022 of $6,000 due to nondeductible contributions before you converted the Traditional IRA to a Roth.

Assuming the traditional IRA was empty before the contribution for 2021:

The 2021 Form 8606 line 14 should show the nondeductible contribution for 2021. This has to be entered on the 2022 return (2022 Form 8606 line 2).
The 2022 Form 8606 line 14 should show the nondeductible contribution for 2022 ($6,000). This has to be entered on the 2023 return (2023 Form 8606 line 2).
The 2023 Form 8606 line 14 should show be $0.

@state-taxes

Re: Backdoor Roth Conversion

state-taxes — Tue, 06 Feb 2024 15:48:34 GMT

Ok, I think I'm getting closer to understanding, but still confused on a few things.

2021 - no contributions between 1/1/21 -> 12/31/21. However, I did a prior year contribution for 2021 in early 2022. My 2021 tax forms never had a 1099 R, therefore I never even reported this. I only had a form 5498. Should this still be reported? If so, do I need to amend my 2021 tax return, by sending over an updated 8606?

Also, updating this form 8606 wouldn't increase any taxes I owe, correct?

2022 - Contributed for prior year, and converted to Roth (hence the 1099 R). I clearly didn't report this correctly, therefore I need to update my 8606 and mail it to the IRS, correct? This also should not increase any taxes for my 2022 year, correct?

2023 - I contributed for prior year (6k) + current year (6.5k) and converted all 12.5k. Using the total basis from my 2022 8606 (6k), my taxes this year should now be correct and I wouldn't owe any taxes on the 12.5k, correct?

Would love to hear your clarification on how I should go forward to fix 2021 + 2022, thank you.

Re: Backdoor Roth Conversion

DianeW777 — Wed, 07 Feb 2024 17:59:26 GMT

Your questions and answers are shown below:

2021 - Very important to file the 8606 now. Here are the instructions again:
1. If you should have filed one with your return in 2022, but failed to do so, or did not complete it correctly, you can file Form 8606 as a stand alone form. It is a signature form and can be filed alone. This eliminates a need to amend the entire tax return.
2022 - Double check your Schedule 1 to be sure you did not take any deduction for an IRA on your return.
1. The 8606, if my understanding is correct, should carry the nondeductible cost basis forward with no other entry. Yes, you should also send an 8606 for 2022. On the 2022 Form 8606 it should have shown the 2023 contribution on line 1, then the cost basis from 2021 on line 2. If this is not the case then you should mail a corrected form.
2023 - Yes. Once the 8606s are filed for 2021 and 2022, showing your basis of $6,000, then include a contribution on your 2023 return in the amount of $6,500 (assuming there was no deductible portion, the full rollover to a Roth should be tax free since it is all nondeductible contributions, meaning your cost basis.

@state-taxes

[Edited: 02/07/2024 | 9:59 AM PST]