Back Door Roth IRA Not Working

Forum|Forum|2 years ago
February 24, 2024
3 replies
43 views

I have been following the procedure posted online in the past several years to enter data about back door Roth IRA conversion. The procedure worked until this year. Turbotax now flags the distribution from 1099R as taxable.

As a test, I deleted the existing return from TurboTax and started a new one. I entered the 1099R data first and TurboTax did not mark the distribution as taxable. However, once I imported the w2 form, the distribution became taxable. What is TurboTax keying on to mark the 1099R distribution as taxable? Thanks.

AnnetteB6

Level 15

It is difficult to determine what information on a W-2 affected the entry of your Form 1099-R for a Traditional IRA to Roth IRA conversion.

When you enter the Form 1099-R before you have entered the non-deductible Traditional IRA contribution, the distribution may be taxed when you answer that it was converted to a Roth IRA. At that point, the basis of the Traditional IRA has not been entered.

Take a look at the following TurboTax help article for step-by-step instructions to enter the backdoor Roth IRA conversion into your return:

How do I enter a backdoor Roth IRA conversion?

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runsAuthor

Level 2

Based on information in one of your links, I enter data about the non-deductible traditional IRA. Once I do that, TurboTax knows the distribution comes from the traditional IRA contribution and it becomes a wash. Now it flags the distribution as non-taxable. Thanks.

dlcnws1

Level 2

I use this site every year. Check it to see if your entries match theirs.

https://thefinancebuff.com/how-to-report-backdoor-roth-in-turbotax.html