I opened a Traditional IRA account in 2024 and moved $7000 (after tax money). Once the fund was available in IRA account, I moved $6900 to Roth IRA.I received a 1099-R for the above $6900 distribution and Turbotax is calculating tax for the whole $6900
Is the backdoor Roth IRA considered a Rollover or a Conversion? If I chose Rollover, I am not taxed. If I chose Conversion, I am charged with tax.
Any help is appreciated.
A backdoor Roth IRA contribution is accomplished by converting a Traditional IRA distribution to a Roth IRA.
Take a look at the following TurboTax help article to make sure that all steps have been completed in your return in order to report the backdoor Roth IRA conversion. You may not have entered the non-deductible Traditional IRA contribution before entering the Form 1099-R reporting the distribution.
Form 8606 showing your $7,000 contribution is required for a backdoor Roth IRA to work tax-free.