topic 8606 question. Contributed & converted $7k to a BDR in 12/2022. On 12/31/2022, had $2 in my tIRA. 8606 changes my $7k to $6,998. How to fix this amt back to $7k? in Retirement tax questions

8606 question. Contributed & converted $7k to a BDR in 12/2022. On 12/31/2022, had $2 in my tIRA. 8606 changes my $7k to $6,998. How to fix this amt back to $7k?

de37421 — Mon, 23 Feb 2026 12:13:16 GMT

Re: 8606 question. Contributed & converted $7k to a BDR in 12/2022. On 12/31/2022, had $2 in my t...

DanaB27 — Sat, 18 Feb 2023 18:28:18 GMT

No, your Form 8606 seems correct if you had pre-tax funds left in the traditional IRA. Please be aware, if had pre-tax funds in your traditional IRA now the pro-rata rule applies. This means that with each distribution/ conversion, you will have a taxable and nontaxable part. You can see the remaining basis on line 14 of Form 8606, this basis can be carried forward. Therefore, each distribution/conversion in the future will have a taxable and nontaxable part until the basis is all used.

The Backdoor Roth only works if your traditional/SEP/SIMPLE IRAs are empty (don't have pre-tax funds).

Please see How to FIX Backdoor Roth IRA Screw-ups and When the Reverse Makes Sense: Benefits of a Reverse Rollover for additional information.

To enter the nondeductible contribution to the traditional IRA:

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 contribution before this tax year.
Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 (if you had a basis in the prior year)
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 a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

To enter the 1099-R conversion:

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”
On the "Review your 1099-R info" 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 from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

Re: 8606 question. Contributed & converted $7k to a BDR in 12/2022. On 12/31/2022, had $2 in my t...

de37421 — Sat, 18 Feb 2023 18:13:20 GMT

I'm sorry that I wasn't clear in my question. I contributed and converted $7k to my back door roth in 12/2022. I thought my tIRA was $0 but I got $2 of interest/dividends on 12/30/2022, so on 12/31/2022, I had $2 in my tIRA. I've spent hours trying to get my 8606 Form to show $7k instead of $6,998 and don't know how to make the change. Yes, I understand that I will have to pay pro rata taxes on the $2 that was in the tIRA on 12/31/2022. TIA.

Re: 8606 question. Contributed & converted $7k to a BDR in 12/2022. On 12/31/2022, had $2 in my t...

DanaB27 — Sat, 18 Feb 2023 18:56:04 GMT

Yes, you cannot change the $6,998 nontaxable distribution because the pro-rata rule applies. Part of your $7,000 basis will be applied towards the $2 left in the account. You can see the rest of your $2 basis on line 14 and you will be able to use it when you convert the $2 in the future.

Therefore, this conversion will have $2 taxable.

To verify your Form 1099-R was $7,000 and you entered the $7,000 nondeductible traditional IRA contribution.