How to report backdoor Roth IRA

[koonsup]

I did my first backdoor Roth IRA (7500) in March, 2024 after completion of 2023 tax report in February, 2024.

I think that conversion is for 2024, but I received Form 5498 in May 2024, it says it is 2023 IRS contribution.

And I received 1099-R form just before, it says Gross distribution ($7502.05), Taxable amount (7502.05) and Distribution code is "2" (I am 59 yrs).

Which step do I need to take in TurboTax or how do I report tax in TurbTax?

[MindyB]

Firstly, when you made the contribution through your brokerage, you should have been asked what year you wanted the contribution to be for. You can choose the prior year up until 4/15.  You will need to contact them and instruct them that the $7,000 was a 2024 contribution, if that is what you wanted, and they will tell you what steps you need to correct this.

Next, when you report the conversion, you will make sure you are only paying tax on the $2 of earnings.  Here are the steps in TurboTax Online, from How do I enter a backdoor Roth IRA conversion? :

"Step 1:  Enter the Non-Deductible Contribution to a Traditional IRA

1. Go to the Traditional IRA and Roth IRA screen, check the Traditional IRA box and select Continue.
2. On the Is This a Repayment of a Retirement Distribution? screen, select No.
3. On the Tell Us How Much You Contributed screen, enter the amount contributed and select Continue.
4. On the Did You Change Your Mind? screen, select No, then answer the questions on the following screens.
5. When you reach the Choose Not to Deduct IRA Contributions screen:
   1. Select Yes, make part of my IRA contribution nondeductible.
   2. Enter the amount you contributed.
   3. If none of your contribution can be deducted, you won't see the option to make part of it nondeductible. Instead, the full amount of your contribution will automatically be nondeductible.
   4. Select Continue.
6. On the Your IRA Deduction Summary screen, review the info and select Continue.

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

1. Go to Wages & income.
2. On the Your income and expenses screen, locate and select the Retirement Plans and Social Security section, then select Start or Revisit next to IRA, 401(k), Pension Plan Withdrawals (1099-R).
3. Answer Yes to Did you get a 1099-R in 2024?, then Continue.
   • If you land on the screen Review your 1099-R info select Add Another 1099-R.
4. Select how you want to enter your 1099-R (import or type it in yourself) and follow the instructions.
5. Answer the questions on the following screens, until you reach Tell us if you moved the money through a rollover or conversion.
6. Select I converted some or all of it to a Roth IRA and Continue.
7. Next, choose Yes, all of this money was converted to a Roth IRA.
8. Continue answering questions until you come to the screen Review your 1099-R info."