topic Traditional IRA to Roth IRA Conversion in Get your taxes done using TurboTax

Traditional IRA to Roth IRA Conversion

SYale2010 — Mon, 09 Mar 2026 04:40:13 GMT

I have a pretty big predicament with my tax filing.

For 2021, I decided to open a traditional IRA with Betterment for the purpose of a backdoor Roth IRA conversion. I contributed $6k of after-tax dollars into the traditional IRA and 1 business day later had it converted to a Roth IRA (I actually lost like 2 dollars lol, so no gains at all).

Now I'm trying to file taxes and Betterment has both box 1 and box 2a filled out both essentially with $6k. After filling out all this information, my federal return plummets approximately $2k.

I researched with Betterment and they will not amend box 2a, which, being the box for being "taxable income" should be $0, I would think at least.

I understand Form 8606 is more for keeping track of this amount for withdrawals when I retire, but my issue is with the filing of taxes now.

Is there something I'm missing? I feel like I'm paying tax on the $6k now with my 2021 taxes even though it already went through income tax...

Re: Traditional IRA to Roth IRA Conversion

SYale2010 — Mon, 28 Feb 2022 16:45:40 GMT

The form I'm referring to with box 1 and 2a is a 1099-R. Forgot to include that.

Re: Traditional IRA to Roth IRA Conversion

DanaB27 — Wed, 02 Mar 2022 02:21:31 GMT

The form is correct. 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:

Open your return
Click “Deductions &Credits” on the top
Click "I'll choose what to work on"
Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed
Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had nondeductible contributions before this tax year
If you had a basis in the Traditional IRA before then enter the amount.
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:

Click "Federal Taxes" on the top and select "Wages & Income"
Click "I'll choose what to work on"
Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
Answer "Yes" to the question "Did You Have Any of These Types of Income?"
Click "I'll Type it Myself"
Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
Click "Continue" and enter the information from your 1099-R
Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
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"
On the "Your 1099-R Entries" screen click "continue"
Answer "yes" to "Any nondeductible Contribution to your IRA?"
Answer the questions about the basis and value

You can verify your entry on line 4 of Form 1040, 4b taxable amount should be $0 since you didn't have any earnings.

Please be aware, since you lost $2 and therefore converted less than your basis you should have a basis of $2 on line 14 of Form 8606 to be used in the future. Please make sure you enter this prior-year basis on your next year's 2022 tax return if you do another backdoor Roth for 2022.

Re: Traditional IRA to Roth IRA Conversion

dmertz — Wed, 02 Mar 2022 01:51:34 GMT

It's correct that this Form 1099-R has the same amount in box 2a as is in box 1. Enter this form as received.

Be sure to click the Continue button on the page that lists the Forms 1099-R that you have entered and answer whatever questions follow. TurboTax will prepare Form 8606 to calculate the actual taxable amount of your Roth converion.