Can I do Backdoor Roth for 2022 in 2023?

[gulsheenk]

@DanaB27 :  thanks a bunch for your comprehensive response.  

1.) If I transfer my funds from the Rollover IRA account to my current employer's 401K account, it has limited investment options.  I will check with my colleagues here today. 

2.) Regarding returning $6K from Traditional IRA account to my personal investment account, fidelity recommended me to complete "Return of excess funds distribution form" for explanation for reporting to IRA, so that I won't be taxed on this transaction. Hoping it works. 

On a side note:  I do need to google about SEP/SIMPLE IRAs. 

Best, 

Gulsheen

[gulsheenk]

Hello, @DanaB27 , 

Hoping all is fine at your end.  As a follow up from our last year's conversation, yes, I did receive 2023 Form 1099-R for the following transactions:

1.)  $ for move from Traditional IRA account to 401K account. Box 7 code:  G. IRA/SEP/SIMPLE box is checked on 1099-R, and 2b Totals Distribution box is checked.  Side note:  if you see the prior conversation, I had to do this to avoid high tax from pro-rate rule. 

2.) $6000 contribution to Traditional IRA, which was then moved back to my personal account as Return of excess funds distribution to undo traditional IRA contribution. It has some amount that's taxable. Box 7 code 82. IRA/SEP/SIMPLE box is checked on 1099-R

However, after entering both 1099-R forms in turbo tax, both are categorized as income, which is incorrect.  Please advise what needs to be done to fix this.  

Best!

Gulsheen

[DanaB27]

Please be aware that the whole distribution will show as income in TurboTax on the summary screen which shows gross income, not taxable income. To verify that the entry is correct please look at form 1040 line 4b (taxable amount), only the earnings from the returned contribution in box 2a should be listed as taxable.

To preview Form 1040:

1. Click on "Tax Tools" in the left menu
2. Click "Tools"
3. Click "View Tax Summary" in the Tool Center window
4. Click on "Preview my 1040" on the left

To ensure to rollover is correctly entered into TurboTax, TurboTax should ask you the following questions after you entered the 1099-R with code G :

1. On the "Was this money rolled over to a Roth IRA?" screen answer "No"

[gulsheenk]

Thanks a ton @DanaB27 . I followed steps that you shared and only $23 is taxable from the overall amount.  

I double checked and I have the following. 

1. On the "Was this money rolled over to a Roth IRA?" screen answer "No"

Best!

Gulsheen