How to report IRA backdoor for 2019 in 2020

[buntypatel3]

Hi,

I performed a backdoor in March 2020 for 2019 and also for 2020. I put 6k for each year (12k total) and then back doored it over to my Roth. I'm having some trouble reporting it on turbo tax. I was reading online that if the backdoor is not done on the same year then you have to file your taxes a certain way. When I get to the IRA Contributions part do I select that I contributed only for Roth or Traditional as well? Would I put $0 for traditional and $6000 for Roth? What would I do next year when I file for my 2020 tax returns with the 1099-R?

Thanks

[DanaB27 · Accepted solution]

You will only enter the nondeductible contribution to the traditional IRA. You do not enter a contribution to a Roth IRA.

To correctly perform a backdoor Roth you contribute to a traditional IRA but make it nondeductible and then convert it to a Roth IRA. You contributed to the traditional IRA for 2019, therefore, you would enter the nondeductible contributions $6,000 to the traditional IRA in TurboTax on your 2019 tax return.

To enter the nondeductible contribution to the traditional IRA ($6,000 for 2019 tax return and then repeat next year for your 2020 tax return) :

1. Login to your TurboTax Account 
2. Click "Federal" from the left side of your screen
3. Click “Deductions &Credits” on the top
4. Scroll down to “Retirement and Investments” and click “Show more”
5. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
6. Select “traditional IRA”
7. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
8. Enter the amount you contributed
9. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
10. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes”
11. If you had a basis in the Traditional IRA before then enter the amount.
12. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount.

Next year on your 2020 tax return when you get the 1099-R for the conversion of the $12,000 you will enter this:

1. Login o your TurboTax Account
2. Click "Federal" from the left side of your screen
3. Scroll down to “Retirement Plans and Social Security” and click “Show more”
4. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan Withdrawals (1099-R)" 
5. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
6. Click "I'll Type it Myself"
7. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
8. Click "Continue" and enter the information from your 1099-R
9. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
10. Then choose “I converted all of this money to a Roth IRA account.”
11. On the "Your 1099-R Entries" screen click "continue"
12. Answer "yes" to "Any nondeductible Contributions to your IRA?"
13. Answer the questions about the basis

[buntypatel3]

Thank you!

[macuser_22]

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@buntypatel3 wrote:

Hi,

I performed a backdoor in March 2020 for 2019 and also for 2020. I put 6k for each year (12k total) and then back doored it over to my Roth. I'm having some trouble reporting it on turbo tax. I was reading online that if the backdoor is not done on the same year then you have to file your taxes a certain way. When I get to the IRA Contributions part do I select that I contributed only for Roth or Traditional as well? Would I put $0 for traditional and $6000 for Roth? What would I do next year when I file for my 2020 tax returns with the 1099-R?

Thanks

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If you converted to a Roth after Dec 31, 2019 then it is a *2020* conversion that will be reported on your 2020 tax return next year.    The April 15, 2020 date applies ONLY to 2019 contribution, not to conversions.   Also any 2019 non-deductible basis contributed in 2020 only applies to 2020, the basis is not retroactive to 2019.

[buntypatel3]

Hi,

@macuser_22  ”Also any 2019 non-deductible basis contributed in 2020 only applies to 2020, the basis is not retroactive to 2019.”

can you please elaborate on this? 

[macuser_22]

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@buntypatel3 wrote:

Hi,

@macuser_22  ”Also any 2019 non-deductible basis contributed in 2020 only applies to 2020, the basis is not retroactive to 2019.”

can you please elaborate on this? 

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If you did not make the 2019 contribution until 2020 then  it would have been impossible to convert that money *in* 2019 since it was not even in the IRA in 2019.    The 8606 for that calculates the taxable amount of a distribution specifically excludes any 2019 contribution made in  2020 on line 4.

As I said before any conversion after Jan 1 2020 is a 2020 conversion, not a 2019 conversion.

[buntypatel3]

Ah ok. makes sense. Thanks for the help

[Jim Coltrin]

I also have done back door Roth in 2020 for both the 2019 and 2020 tax years in January of  2020. 

I use the desktop version of TurboTax.  The step that was indicated did not work.  I did not have the opportunity to "choose to not deduct IRA contributions".  Would you help me with the steps for the desktop version. 

Thank you, Jim

[macuser_22]

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@Jim Coltrin wrote:

The step that was indicated did not work.  I did not have the opportunity to "choose to not deduct IRA contributions". 

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If your MAGI is to high to deduct a Traditional IRA contribution then you will not get that option but a 8606 form should be generate with the non-deductible contribution on line 1.