Backdoor Roth Entry into Turbotax

[Ghosh2]

hi,

I made a Contribution to Traditional IRA of 6500 on Apr, 2024 for the year 2023. I had moved entire 6500 from Traditional IRA to ROTH next day thereby doing a backdoor Roth. I have not received any 1099R from my bank as the transactions were entered recently.

Kindly advice how do I record these transactions in Turbotax for the year 2023.

[rich4545]

I am in the same boat. There isn't much information on this situation.

[DanaB27]

You will report your nondeductible contribution on your 2023 return and TurboTax will create Form 8606 with the basis on line 14 which will be carried over to 2024.

To enter the nondeductible contribution to the traditional IRA on your 2023 return:

1. Open your return
2. Click “Deductions &Credits” on the top
3. Click "I'll choose what to work on"
4. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
5. Select “traditional IRA”
6. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
7. Enter the amount you contributed
8. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
9. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had nondeductible contributions before this tax year
10. Enter your basis in the Traditional IRA from your 2022 Form 8606 line 14 (if you had a basis in the prior year)
11. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

Next year on your 2024 return you will report the conversion:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Click "I'll Type it Myself"
6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
7. Click "Continue" and enter the information from your 1099-R
8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
9. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
10. On the "Your 1099-R Entries" screen click "continue"
11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
12. Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

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

[Sjkraus]

If I made the $6500 contribution for 2023, and $8000 for 2024 at the same time would I enter anything different? Also would it be different if we don’t have a work retirement plan? 

I really appreciate your help because there is no help on this and yet everyone tells you to contribute before it’s too late! Many thanks 

[DaveF1006]

If a traditional IRA deduction, you may take the full deduction if you have no retirement plan at work. Roth contributions are limited if your income reaches a certain level regardless whether you have a retirement plan or not. 

Roth Contribution Limits