Carryovers to 2022

[nojnof]

This year I'm using Turbotax to file my taxes.  And I have a few questions on carryovers I've seen from my previous CPA.

Under carryovers to 2022:

Federal Carryovers:

Taxpayer Roth Contribution Basis (amount)

Deductible State and local Taxes (amount)

California Carryovers

Taxpayer Roth Contribution Basis (same amount as above)

My questions:

What am I supposed to do with those for 2022 tax filing?  

Where I enter them in Turbotax?

Also, I was not (2022) and am not a resident of California;  And I have no income from California.  Do I still have to file CA tax?

Many thanks in advance

[DanaB27]

Yes, you can track your Roth basis with TurboTax. Please follow these steps during the federal interview:

1. Click on "Search" on the top right and type “IRA contributions” 
2. Click on “Jump to IRA contributions"
3. Select "Roth IRA" 
4. Enter any contributions for 2022
5. On the "Did You Open a Roth IRA Before 2021?" answer "Yes"
6. On the "Let Us Track Your Roth IRA Basis" screen answer "Yes"
7. TurboTax will ask you follow-up questions in regard to net contributions and conversions.

To enter the state and local taxes:

1. Click "Deductions & Credits" (under Federal) on the left
2. Scroll down and click "Show more" next to "Estimates and Other Taxes Paid"
3. Scroll down and click "Start" next to "Estimated Tax Payments"
4. On the "Estimated taxes" screen, scroll down to "2021 state estimated taxes paid in 2022" and "Start/Revisit".
5. On the "How much did you pay in state estimated taxes?" screen, enter the amount paid.
6. Continue with the onscreen interview until complete. 
7. On the "Estimated taxes" screen, scroll down to "2021 local estimated taxes paid in 2022"
8. Continue through the interview

No, you don’t need to file a CA state return if you were not a CA resident in 2022 and had no CA-sourced income.

[Edited 2/26/2023 | 6:33 am PST]

@nojnof 

[nojnof]

I forgot to mention, I converted $20000 of traditional IRA to Roth IRA in 2022; I already entered that in Turbo tax.  The carryover Roth basis $15000 is to be entered as a 2022 contribution?  I don't understand.

As for the carryover State and local taxes amount, it's considered a prepaid taxes for 2022?    That amount I already paid to the State in 2021.  It doesn't make any sense to me that it's a carryover deductible for 2022. please explain.

[DanaB27]

Generally, if you show federal carryover for Deductible State and local Taxes it means you paid these taxes in 2022 for 2021 and your CPA didn't deduct this in your 2021 tax return. Therefore you can deduct it on your 2022 tax return because it was paid in 2022.

No, you do not enter the basis as a contribution but you have the option to track your Roth IRA basis (prior year net contributions) and prior year conversions in the contribution section. TurboTax will ask if you want to track your Roth basis and then you can enter your information in the follow-up question (see instructions above).

[nojnof]

Referencing what you said, "Generally, if you show federal carryover for Deductible State and local Taxes it means you paid these taxes in 2022 for 2021 and your CPA didn't deduct this in your 2021 tax return. Therefore you can deduct it on your 2022 tax return because it was paid in 2022."

But I already paid in 2021.  This really confuses me because my CPA even gave me a coupon to pay in 2021.  Is there an advantage to not deduct it in the same year and carry it over to the following year?  And for my case, if I enter it in for 2022, wouldn't this confuse the IRS as well?

[nojnof]

I don't see these in Turbotax 2022:

• Scroll down and click "Show more" next to "Estimates and Other Taxes Paid"
• Scroll down and click "Start" next to "Estimated Tax Payments"

Under "Estimates and other taxes paid, I see:
 Estimates

Other income taxes

Which one need to select?

[nojnof]

There are:

2021 STATE estimated taxes paid in 2022

and also 2021 LOCAL estimated taxes paid in 2022

Do I enter the same amount in each or just the State?

Thanks

[DanaB27]

If you didn't pay any 2021 taxes in 2022 then you won't enter the estimated taxes paid into TurboTax. Did you make any estimated state tax payments in 2022 or only had state tax withholdings? You might want to verify with your CPA what that carryover amount is. You only enter the taxes paid in 2022 on your 2022 tax return.

Please select "Estimates". 

If you have state and local taxes paid then you will enter the state taxes paid in 2022 for 2021 in "2021 STATE estimated taxes paid in 2022" and the local taxes paid in 2022 for 2021 in "2021 LOCAL estimated taxes paid in 2022".

[nojnof]

I entered the Roth basis.  Where can I see the Roth total since I did also do a conversion in 2022?

Thanks

[DanaB27]

You can see your total Roth contribution basis and conversion basis on the "IRA Information Worksheet" Part II.  For the 2022 conversion scroll down to part V.

Please review the conversion steps if needed:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Click "I'll Type it Myself"
6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
7. Click "Continue" and enter the information from your 1099-R
8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
9. 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"
10. On the "Your 1099-R Entries" screen click "continue"
11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
12. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

@nojnof 

[nojnof]

Regarding step 12/12, is that for tracking purposes only?  I never had to report to my CPA what the total of my traditional IRA was.  Can I just skip step 12?

Thank you.

[JulieS · Accepted solution]

No, it is not just for tracking purposes. It is important to track your IRA contributions and year end value because you will need that information when you start withdrawing money from the account.

You are free to skip this if you want to and it will only change your return in a year where you had an IRA distribution.