Backdoor conversion keeps showing taxable amount if you don't have prior year basis, it also charged 6% penalty

[Dur1anpass1onfru1t]

I did backdoor conversion which is non-deductible IRA deposit, then converted to ROTH in 2025 on Premier version with desktop entry.   Since I said no to 2024 or prior year deposit, Turbo Tax tax the entire amount.  I then try to work around, and show there is 2024 basis, the taxable amount shows 0, but the 8606 form generated excess contribution under traditional IRA , instead in line 1 for non-deductible IRA contribution which prompted 6% penalty tax on form 5329. There is no win with Turbo Tax. If it allows me to change 8606 then the penalty will not be charged as it should not be charged.  I called their support, no help! Very frustrating!  HELP!

[AnnetteB6 · Accepted solution]

Take a look at the following TurboTax help article and be sure you have used these steps to report your backdoor Roth IRA conversion.  It would probably be best to delete the entries you have made so far related to the IRA contribution and distribution/conversion and start from scratch.

How do I enter a backdoor Roth IRA conversion?