How to file properly for Backdoor Roth IRA in Turbotax Premier

[kimyu92]

My wife and I have been doing backdoor Roth conversions since last year. We also took advantage of Robinhood ira matching last year.

Me:
2024 (for 2023 contribution): Contributed $6,500 to a Traditional IRA and then converted to Roth.
2024 (for 2024 contribution): Contributed $7,000 to a Traditional IRA and converted to Roth.
2025 (for 2025 contribution): Contributed $7,000 to a Traditional IRA and convert to Roth.

Wife:
2024 (for 2023 contribution): Contributed $6,500 to a Traditional IRA and converted to Roth.
2025 (for 2024 contribution): Contributed $7,000 to a Traditional IRA and convert to Roth.

My 2024 Form 1099-R show $13,905 while my wife one showed as $6695
In this situation, when it comes to filing jointly with my wife, however due to income limit, what should we do?

1. How should I file in order to avoid penalty in Turbotax?

2. Do I need to amend our tax for 2023?

3. How do we keep it much more easier for upcoming year?

4. Should my wife also contribute 2025 in year 2025?

[AnnetteB6]

Reporting a backdoor Roth IRA conversion in TurboTax is a two-step process for each tax year.  First, you report the non-deductible contribution that was made to your Traditional IRA.  Second, you enter the Form 1099-R that shows the distribution from the Traditional IRA and indicate in the follow-up questions that the amount was converted to a Roth IRA.  If both you and your spouse are doing this, then each step is performed for each of you.

You should have completed step 1 for the 2023 conversion when you were filing your 2023 tax return.  This would show the non-deductible contribution on Form 8606 which would be carried forward into your 2024 tax return.  If you did not report this on your 2023 tax return, then see the instructions in the TurboTax help article below under the section If your conversion contains contributions made in 2024 for 2023.  

If you follow the instructions in the article, you should only find that $405 of your Form 1099-R will be taxable and $195 of your wife's Form 1099-R will be taxable.  This is most likely due to the account earning income between the time of the contribution and the distribution.  

To answer your questions:

1 - Follow the instructions in this article to report this correctly in TurboTax - How do I enter a backdoor Roth IRA conversion?

2 - No, you do not need to amend your 2023 return as long as you file Form 8606 separately to the IRS reporting the non-deductible contribution that was made for 2023 if it was not reported as part of your 2023 return.  Again, see the instructions in the article above.

3 - If you make the non-deductible Traditional IRA contribution and the subsequent conversion to a Roth IRA in the same calendar year, then the process to report it in your tax return is much simpler.

4 - That is a personal decision.  Be sure to report the 2024 non-deductible Traditional IRA contribution for you wife on your 2024 tax return.  You will not receive the Form 1099-R until 2025, so her situation will span over two tax returns. 

One more thing.  There is currently a situation where you may not see all of the relevant questions on the screen as you go through TurboTax reporting your information.  This is being addressed by the development team.  Use the link in the article below to register you email address to receive updates:

Why is my backdoor Roth IRA conversion being taxed?

@kimyu92

[edited 2/18/2025 | 6:17 am PST]