topic I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099R forms. How do I enter them in tt to generate correct 8606? in Retirement tax questions

I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099R forms. How do I enter them in tt to generate correct 8606?

zenavoca — Tue, 16 Mar 2021 06:02:02 GMT

I tried following https://thefinancebuff.com/how-to-report-backdoor-roth-in-turbotax.html but it only works for current year. When I add the other 1099R(for 2019) it starts to reduce my refund amount.

Re: I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099...

DanaB27 — Wed, 17 Mar 2021 17:36:06 GMT

To clarify, you made the contribution for 2019 in 2020 and made another contribution for 2020 in 2020. Then you converted both contributions in 2020 and got two separate 1099-Rs 2020.

You will have to enter the 2019 nondeductible contribution on your 2019 tax return to create Form 8606:

Login to your TurboTax Account
Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
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 nondeductible contributions before the 2019 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.

If you have already filed your return without this entry then please see How do I amend a 2019 return in TurboTax?

Then on your 2020 tax return please follow these steps to enter your nondeductible contribution:

Login to your TurboTax Account
Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
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”
Enter the amount of nondeductible contribution (basis) from 2019 and earlier
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:

Login to your TurboTax Account
Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Click "Continue" and enter the information from your 1099-R
Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA” enter amount converted
On the "Your 1099-R Entries" screen click "add another 1099-R" and follow steps 4 and 5
On the "Your 1099-R Entries" screen click "continue"
Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
Answer the questions about the basis and value of the traditional IRA.

You can check your entry on line 4. If you had only nondeductible contributions and converted all of the the traditional IRA then only the earnings will be taxable on line 4b.

Click on "Tax Tools" in the left menu
Click "Tools"
Click "View Tax Summary" in the Tool Center window
Click on "Preview my 1040" on the left

Re: I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099...

zenavoca — Tue, 16 Mar 2021 20:51:37 GMT

Really appreciate your help Dana! I did not do my 2019 taxes with Turbotax and for 2020 I am using the online version. Is it still possible to get 2020 correct.

I am trying to follow the steps here but for 2020 I do not see the steps you described. Let's say I have 5000 for 2019 and 6000 for 2020. My understanding is your 2019 and 2020 steps are for contribution. 1099 R is for conversion.

So where else do I enter the 5000 and 6000 in 1099 R steps? after I added the 2nd 1099R my refund drops which does not seem right.

To enter the 1099-R distribution/conversion:

9. Answer the questions about the basis and value of the traditional IRA. - I entered basis 56 which was a carryover from previous years and value 0

Re: I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099...

DanaB27 — Wed, 17 Mar 2021 14:13:17 GMT

If you made your 2019 contribution nondeductible/ it was nondeductible because you had a retirement plan at work and were over the income limit then you will have Form 8606 on your 2019 return with a $5,000 basis from the contribution (plus the previous basis of 56). If you didn't make it nondeductible then you have to amend the 2019 return to make it nondeductible.

On your 2020 return:

If your 2019 contribution was deductible and you choose not amend it then this part of the conversion will be taxable on your 2020 return and your entry in step 9 is correct.

If your 2019 was nondeductible or your choose to amend the 2019 return to make it nondeductible then you will have to include the $5,000 in step 9 for a basis of $5,056.

The $6,000 2020 contribution you will make nondeductible when you enter the contribution as described in the post above.

Re: I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099...

zenavoca — Wed, 17 Mar 2021 16:53:34 GMT

thanks so much! It looks like it is working for me. One last question, it does not look like line 8 has been filled on my 8606 after I followed the process you mentioned, everything else looks good. Is that normal?

Re: I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099...

DanaB27 — Wed, 17 Mar 2021 17:43:19 GMT

You entered the amount that was converted on the “Tell us if you moved the money through a rollover or conversion” screen, correct? Does the amount show up on line 16?

If everything is entered correctly then only your earnings (if you had any) will be taxable.

Re: I contributed/converted to both tax year 2019 and tax year 2020 in year 2020 and got two 1099...

zenavoca — Wed, 17 Mar 2021 20:19:04 GMT

yes it shows up on line 16 just not on line 8