Reporting on Backdoor ROTH conversion for 2018 & 2019 nondeductible IRA in 2019

CL7 — Wed, 15 Apr 2020 18:31:05 GMT

In 2019 before 4/15/19, I made 2 IRA nondeductible contributions ($6,500 for 2018 & $7,000 for 2019) & rolled over to Roth IRA shortly. I have already filed Fm 8606 in 2018 for the nondeductible IRA. On January 2020, I received a 1099 R from Vanguard lumping my both contributions together as taxable total distribution $13,506 (code 02 on box 7), & taxable amt not determined. I have keyed in 1099R in Turbo Tax & stated it is a rollover. However, 1040 treats it as total distribution and added it as income. Why? How should I report the Fm 8606 this year? Thanks!

Re: Reporting on Backdoor ROTH conversion for 2018 & 2019 nondeductible IRA in 2019

DanaB27 — Wed, 15 Apr 2020 22:35:16 GMT

Please be aware that the whole distribution will show as income in TurboTax on the summary screen which shows gross income, not taxable income. To verify that the entry is correct please look at form 1040 line 4b (taxable amount).

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 ($7,000):

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 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 ($13,506):

Click "Federal Taxes" on the top
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 converted all of this money 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

Re: Reporting on Backdoor ROTH conversion for 2018 & 2019 nondeductible IRA in 2019

CL7 — Sat, 18 Apr 2020 13:53:00 GMT

Thanks so much for the detailed answer. Appreciate it greatly! 👍

topic Reporting on Backdoor ROTH conversion for 2018 & 2019 nondeductible IRA in 2019 in Retirement tax questions

Reporting on Backdoor ROTH conversion for 2018 & 2019 nondeductible IRA in 2019

Re: Reporting on Backdoor ROTH conversion for 2018 & 2019 nondeductible IRA in 2019

Re: Reporting on Backdoor ROTH conversion for 2018 & 2019 nondeductible IRA in 2019