how to answer question about balance of IRA account as of the end of the year before last?

[kim_hung_lo]

I have non-deductible IRA contribution in 2021 but I did not do the Roth conversion. So, when filing the 2021 tax, I did not have the retirement income to be files. But I did track my contribution of $7000. I continued to have contribution in 2022. Now when i am filing the 2022 tax, I, again, track my contribution. TurboTax asked me my balance as of 12/31/2021. I looked at the year-year statement and enter the balance from there. Obviously, that will be different from $7000. But, then, TurboTax is saying the amount is not matching the number in my 2021 tax return. So, what should I do?  Should I just answer that question with my contribution amount as it is regarding the cost basis or to give the number from the yearend statement and provide an explanation? 

[DanaB27 · Accepted solution]

Please verify that you didn't enter the balance of your statement for the basis question. TurboTax will first ask for the basis as of December 31, 2021, on the "Let's find Your IRA basis" (this should be $7,000 listed on your 2021 Form 8606 line4 14) and then on the "Tell us the value of your traditional IRA" screen you will enter the value of all traditional, SEP, and SIMPLE IRAs on December 31, 2021 (from your statement).

To enter the nondeductible contribution to the traditional IRA:

1. Open your return
2. Click “Deductions &Credits” on the top
3. Click "I'll choose what to work on"
4. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
5. Select “traditional IRA”
6. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
7. Enter the amount you contributed
8. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
9. 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
10. Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 (if you had a basis in the prior year)
11. 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: 

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

[kim_hung_lo]

Thanks.  It was my mistake. I do not know why I did not read properly.  It was asking the basis, not the balance.  Since I did not do conversion, it did not ask me the balance.

Thank you very much.