Backdoor roth IRA

[bajras]

In March 2021, I performed an after-tax contribution of $12000 to a traditional IRA for both 2020 and 2021 (total of $12000) prior to filing my taxes for 2020 and promptly rolled it over into a Roth IRA. I also filed form 8606 for 2020 contribution in the year 2021. The 2021 1099-R shows a $12000 distribution and taxable amount. I need to now make sure that I fill out the 8606 for this year correctly but when I go through the process I get the message: "Income too high to deduct an IRA contribution."

Basically Im trying to do what this article says: https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/

at the bottom of the page: Late Contributions to the Backdoor Roth IRA.

[DanaB27]

Yes, 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 that your income is too high to deduct the contribution and then a screen saying $0 is deductible. This is good, since you want it to be nondeductible so TurboTax will create Form 8606. You can continue to enter your Form 1099-R.

To enter the nondeductible contribution to the traditional IRA:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
9. If you had a basis in the Traditional IRA before then enter the amount.
10. 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).

To enter the 1099-R conversion: 

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R
4. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
5. On the "Review your 1099-R info" screen click "continue"
6. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
7. Answer the questions about the basis from line 14 of your 2020 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

[bajsam]

How about I make sure the 8606 page 1 and 2 are filled properly? Since I have 12000 contributed on year 2021 for both year 2020 and 2021. I have to make sure it gets populated as show in this link, all the way at the bottom? https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/

I tried looking at the tools section it does show any thing about the deductible and want to make sure I get the right 8606 before I pay for the service?

[DanaB27]

Unfortunately, the only way to look at Form 8606 in TurboTax online is to pay for your return:

1. Select Tax Tools on the left  
2. Select Print Center and choose the print center