So just like every year, I contribute to a non-deductible Trad IRA, and then a few days later, I convert it to a Roth IRA (backdoor).
In Jan 2022, I added $6000 to non-ded TIRA (in a mutual fund), and then a few months later (but before end of 2022), I converted $6152 (incl. $152 of earnings) to Roth IRA (same mutual fund). When I did my taxes in Turbo Tax, it correctly showed:
IRA Distributions - nontaxable: $6000
IRA Distributions - taxable: $152
BUT for 2023, when I did the same thing, Turbo Tax is calculating my taxable amount differently. In 2023, I added $6500 (as cash), and then converted $6502 (incl. $2 of earnings) to Roth IRA few days later as cash. And then, in Roth IRA, I added it to a mutual fund. Turbo Tax shows:
IRA Distributions - nontaxable: $3250
IRA Distributions - taxable: $3252
Why is that? The only thing different in 2022 versus 2023 was converting to Roth when the money was in a mutual fund versus cash. Are there other tax situations in 2023 that could have made Turbo Tax not count $6500 as non-taxable IRA Distributions?
2023 1099-R has $6501.79 in box 1 (Gross distribution) and the same amount in 2a (Taxable amount). Both boxes in 2b are checked. Box 7 (Distribution code is 2, and IRA / SEP / SIMPLE has a X.
2022 1099-R was identical except it had $6151.86 in box 1 (Gross distribution) and the same amount in 2a (Taxable amount). Both boxes in 2b were checked. Box 7 (Distribution code was2, and IRA / SEP / SIMPLE had a X.
BTW, I noticed there was $2.69 sitting in my non-deduc TIRA on 12/31/23 even after I did my 2023 conversion in October 2023.
