Backdoor Roth

[adllough1]

I contributed 12K to a traditional IRA in April 2021.  6K was for 2020 anf 6K was for 2021.  I immediately converted this to a roth in April 2021.  My 1099 for 2021 had a distribution of $12K from the traditional IRA which I classified as all converted to a Roth.  When I go to the deductions page in Turbo Tax, all I can claim for 2021 as a contribution is $6K.  Therefore, the program is calculating that I owe tax on the remaining $6K.  How do I fix this?

[macuser_22]

The 1099-R interview will ask it you tracked your non-deducible contributions,  say yes.  Then it asks if yu had prior years non deductible contributions, enter the 2020 8606 form line 14 which should be your 2020 contribution.  

If you do not have a 2020 8606 form then you failed to enter it in 2020 as an IRA contribution that was to be non-deducible that should have been part of your 2020 tax return, if not you need to amend 2020 and add it so you can use it to offset your 2021 tax.

[FangxiaL]

Follow the two-step process to properly enter your backdoor Roth conversion:

Step 1: Enter the Non-deductible contribution to a Traditional IRA:

1. Open your return if it's not already open
2. Inside TurboTax, search for ira contributions and select the Jump to link in the search results
3. Select Traditional IRA on the Traditional IRA and Roth IRA screen and Continue
4. Answer No to Is this a Repayment of a Retirement Distribution?
5. On the Tell Us How Much You Contributed screen, enter the amount contributed and continue
   • Enter $6,000 for Your total 2021 traditional IRA contributions
6. Answer No on the Did You Change Your Mind? screen
7. Answer No on Any Excess IRA Contributions Before 2021?
8. Answer Yes, I made and tracked nondeductible contributions to my IRA, or No, I did not make and track nondeductible contributions to my IRA. If you don't have any other Traditional IRA accounts, you can answer Yes
9. Enter $6,000 for Total Basis as of December 31, 2020 on next screen
10. Answer the questions on the following screens, until you reach Choose Not to Deduct IRA Contributions. Select Yes, make part of my IRA contribution nondeductible and enter $6,000 in the box. 

Step 2: Enter the Conversion from a Traditional IRA to a Roth IRA

1. Inside TurboTax, search for 1099-r and select the Jump to link in the search results
2. Answer Yes to Did you get a 1099-R in 2021?, then Continue
   • If you land on Your 1099-R Entries screen, select Add Another 1099-R
3. Select how you want to enter your 1099-R (import or type it in yourself) and follow the instructions
4. Answer None of these apply when you reach the screen Do any of these situations apply to you?
5. Select I converted some or all of it to a Roth IRA on the Tell us if you moved the money through a rollover or conversion screen
6. Next, choose Yes, all of this money was converted to a Roth IRA
7. Continue answering questions until you come to the Your 1099-R Entries screen

To check the results of your backdoor Roth IRA conversion, see your Form 1040:

1. On the left side of your screen, select Tax Tools, then Tools
2. Under Tool Center, select View Tax Summary
3. On the left side of your screen, select Preview my 1040
   • Your backdoor Roth IRA amount should be listed on Form 1040, Line 4a  as IRA distributions
   • Taxable amount should be zero unless you had earnings between the time you contributed to your Traditional IRA and the time your converted it to Roth IRA, then the earnings would be taxable
   • Schedule 1, Line 20 IRA deduction, should be blank
4. Select Back on the left side of your screen to return to where you left off in TurboTax

@adllough1