1099-R Backdoor Roth IRA increasing my Tax

[barathvasu]

Hi Turbo Tax,

I entered my backdoor roth ira contribution and it increased my taxes by $1500. Can you please help me resolve this issue?

My 8606 (year 2022) Row 1 and 2 are having $6000. Row 3,5,13,16,17 is $12,000.

My 8606 (year 2021) Row 1 and 2 are having $6000. Row 3 is 12,000, Row 4, 5,13, 16,17 is $6000. 

Can you please guide me on how to avoid the duplicate Tax situation?

[barathvasu]

I went through this step and entered, now it's not adding extra tax but I am not sure if my 8606 form is correct or not.
https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...

Here are the entries in 8606
Row 1: $6000
Row 2:  $0
Row 3: $6000

Row 16 & 17 : $ 6000

Question:
1. Shouldn't my Line 5 be $12,000? Because Row #2 should have $6000 right? 
2. Will by any chance my 8606 add to the total of all my Backdoor i.e. year 2021,2022,2023 to $18000 or not?

[DanaB27]

Yes, your entry for 2023 looks correct. You do not have a entry on line 2 because you do not have a basis on line 14 of your 2022 Form 8606.

No, Form 8606 will not add the total of all your backdoor.

Please see How do I enter a backdoor Roth IRA conversion? for additional information. 

Your 2021 and 2022 Form 8606 seem correct, except you should have $6,000 on line 14 of the 2021 Form 8606?

Did you make a $6,000 nondeductible contribution for 2020? And you made a $6,000 nondeductible contribution for 2021? And converted $6,000 in 2021?  If yes, then you would have $6,000 on line 1 for the 2021 contribution and $6,000 on line 2 for the prior year basis on your 2021 Form 8606. Line 14 should be $6,000 and this will be carried over to the 2022 Form 8606 line 2.

You made a $6,000 nondeductible contribution for 2022 and converted $12,000. Therefore, you do not have a basis to carry over to 2023.

[barathvasu]

Thanks for your quick response!

Your 2021 and 2022 Form 8606 seem correct, except you should have $6,000 on line 14 of the 2021 Form 8606? <Bharath> Yes I have $6000 in line 14 of my 2021 Returns

Did you make a $6,000 nondeductible contribution for 2020? <Bharath>YES

And you made a $6,000 nondeductible contribution for 2021? <Bharath>YES (Are you specifically asking when did I  contribute i.e. did I contribute for 2020 in  Jan - April of 2021? If yes, then I need to check my Trading account.

And converted $6,000 in 2021?  If yes, then you would have $6,000 on line 1 for the 2021 contribution and $6,000 on line 2 for the prior year basis on your 2021 Form 8606. Line 14 should be $6,000 and this will be carried over to the 2022 Form 8606 line 2. <Bharath> I see all these entries in my 2021 and 2022. Can you please detail me why my 2021 and 2022 looks like this, whereas my 2023 doesn't  look similar to this?

Even though you answered it, I am repeating my question for 2023 for me to be on the same page. Below entry in my 8606 of 2023, is correct? Please confirm.

Here are the entries in 8606 in 2023
Row 1: $6000
Row 2:  $0
Row 3: $6000

Row 16 & 17 : $ 6000

[DanaB27]

You have entries on line 2 of your 2021 and 2022 Form 8606 because you had a prior year basis left in your traditional IRA (shown on line 14 of your 2020 and 2021 Form 8606). For 2022 you did not have a basis left since you converted everything in 2022. Therefore, you do not have an entry on line 2 on your 2023 Form 8606.

Yes, you 2023 Form seems correct. You contributed $6,000 for 2023 and converted $6,000 in 2023.