Hello Turbo Tax community, I need your help. I know there are many articles out there on the backdoor roth ira process but I can't find anything that matches my exact situation.
In 2023, I contributed to my Roth IRA account on a regular basis until i reached the max $6,500 contribution limit for the year. Before the year ended, I realized my income was going to place me outside the eligibility to contribute ANY amount to a roth IRA. By then, I had already earned $695 in interest and dividends. I proceeded to recharacterize the entire balance of roughly $7,195 to a newly created, traditional IRA account with the intent to convert this back to my original roth IRA account. A few days went by before I was able to complete this and ended up earning a few dollars on the traditional IRA account before the conversion.
I have two 1099-R's, one for the traditional and one for the roth. I have filed both under wages and income and made sure to select the option for "Yes, all of this money was converted to a Roth IRA" when filling the traditional IRA 1099-R.
On deductions and credits, I have both the tradition IRA and the roth IRA boxes checked, stating that I have contributed to both accounts during the 2023 tax year. When asked how much I contributed the the traditional IRA, however, I typed "0" because the notes say "do not enter roth contributions, even if you later recharacterized them to a traditional IRA". I know this note was not present in the 2022 and earlier versions of Turbo Tax from what I've seen on the message boards. The value of my traditional IRA at the end of 2023 was zero, since I converted it to a roth IRA before year's end. I then continued to state that I contributed the full $6,500 to a roth IRA and recharacterized $6,500 of this contribution to a traditional IRA, and completed the roth IRA explanation statement. **quick question on this, since I made multiple contributions throughout the year, the date of the original contribution is just the date that I made the first contribution, right? they are not looking for the dates of each contribution?**
Anyways, all of this to leads to the message "income too high to deduct an IRA contribution". Does this sound right? It looks like I'm on the hook to pay $733 in taxes on the IRA distributions, which is the sum of the interest earned in the roth IRA prior to recharacterization and the interested earned on the traditional IRA prior to conversion. At least for the roth interest, shouldn't it have been tax free? Maybe I filed something wrong?
Apologies for the long question. I'm very new to this and any guidance you can provide would be greatly appreciated. Thanks in advance!
