Incorrect Form 8606 2024

[Will102]

There is a bug for the 2024 process that I cannot get around. I have tried many ways. In 2024 January my spouse did a contribution to Traditional IRA, which corresponded to 2023 and 2024. She rolled both to Roth IRA and neither are taxable. When I fill out the form, even if I play with the basis, it says the 2023 amount is taxable which is incorrect. How do I manually edit for 8606?

[DanaB27]

To confirm the balance of your spouses the traditional IRA was $0 at the end of 2024? Did your spouse have any pre-tax funds in the  traditional/SEP/SIMPLE IRAs? If the balance was not $0 and included pre-tax funds then the pro-rata rule applies. This means that with each distribution/ conversion you will have a taxable and nontaxable part. You can see the remaining basis on line 14 of Form 8606, this basis can be carried forward. Therefore, each distribution/conversion in the future will have a taxable and nontaxable part until the basis is all used.

The contribution for 2023 should have been entered on her 2023 return and she should have a 2023 Form 8606 with the basis on line 14. This basis will be entered on your 2024 return.

To enter the nondeductible contribution to the traditional IRA for 2024:

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. Enter your basis in the Traditional IRA from your 2023 Form 8606 line 14 (if you had a basis in the prior year)
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 Form 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 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

[Will102]

Yes I confirm her balance was 0

[DanaB27]

Are you able to enter her basis from her 2023 Form 8606 line 14 after entering her all her Form 1099-R?  If you are still having issues after following the instructions above, it would be helpful to have a TurboTax ".tax2024" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Online: 

1. From the left menu select Tax Tools. 
2. Then select Tools below Tax Tools. 
3. A window will pop up which says Tools Center.  
4. On this screen, select Share my file with Agent. 
5. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
6. Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.  

The instructions for TurboTax Download: 

1. On your menu bar at the very top, click "Online"
2. Select "Send Tax File to Agent"  
3. Click "Send"
4. The pop-up will have a token number
5. Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[nagidad0728]

I find that line 7 on form 8606 is generated incorrectly.  It does not match line 4B on the 1040-sr and does not make a proper deduction for QCDs

[DanaB27]

I cannot recreate this issue, line 7 excludes correctly the QCD. Also, if you had a basis in the traditional IRA then the amount on line 4b of Form 1040 comes from line 15c of Form 8606.

@nagidad0728