Roth IRA conversion got taxed again

[2Double]

EDIT:

line 1: nondeductible contributions to traditional IRAs for 2024, including those made for 2024

from January 1, 2025, through April 15, 2025.

line 2: total basis

line 3: line 1 +line 3

line 13: nontaxable portion of all your distributions

line 15c: taxable amount.

tax year 2023: line 1, 3, 5, 13 ($6490), All the other lines are Zero.

tax year 2024: line 1 ($7001), line 2 (ZERO), line 3 ($7001), line 5 ($7001), line 13 ($7001), line 15a ($6490), line 15c ($6490)

I think 2023 was filed correctly because the taxable amount is zero but the year 2024 is wrong because the amount I contributed in 2023 is mentioned as taxable. 

Hello,

Pls help. I think I made a mistake in my tax year 2024 and paid tax on roth IRA from 2023.

I contributed and did backdoor Roth IRA in March 2024 for the tax yr 2023. I filed for 2024 after that and mentioned that amount in form 8606.

I contributed and did backdoor Roth IRA conversion in Sep 2024 for that year. I filed tax year 2024. Now I see that form 8606 line 15a is from yr 2023 and also line 15c is the same. Looks like that is the taxable amount, but it should not be taxable, correct?  Line 1 is for yr 2024 and line 2 is zero.

Please help me if I need to addend it. Can I get refund of that extra tax? Is it easy to file or need accountant?

Thanks a lot

[baldietax]

this is a bit confusing to follow what your referencing on each line back to 2023 but from what you're describing...

for 2023 you only had a non-deductible contribution.  think of backdoor roth as 2 separate transactions, the contribution to the Trad IRA can be done in March 2024 backdated to 2023, but the Roth conversion part done in 2024 would apply to your 2024 taxes.

your 2023 8606 should have only reflected the contribution and a basis carryover to 2024, no tax unless you were doing any other distributions or conversions in 2023.

your 2024 8606 line 2 should have had that carryover, plus the 2024 contribution done in Sep 2024 on line 1.  You should have had 1099-Rs totalling both the Mar and Sep Roth conversions that should have landed on line 8.

I'll pause there if that helps unravel what happened between 2023/4 and if still stuck pls post more details what you are seeing on the 8606s.

If you need to amend 2023 taxes you can only do that on desktop and print/mail the 1040X etc.  If you only need to fix the basis on 8606 or didn't file 8606 and it has no tax impact, I don't think you need to amend taxes for that if the 1040 didn't change but not sure all the rules - see comments at the end of this article about prior year 8606.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...

if you paid tax in 2023 that was a mistake you can still get a refund on 2023 (2022 deadline for refunds is this April).

to do an amendment for prior year in desktop it's important to save a copy of your .tax file for the original return, see guidance here (and always have backups anyway - also ensure you have PDF with all forms and worksheets as your official filing record, the .tax files can only be opened by Turbotax and they stop supporting the s/w after a few years).

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-return/amend-change-correct-return-a...

[2Double]

Thank you for your reply. I added an edit in my post.

I contributed to traditional IRA and did backdoor roth IRA conversion in March 2024 and filed that for 2023 which I think was correct and the amount in form 8606 was not taxable.

But the tax year 2024 I think has issue because the amount I contributed in 2023 shows in my 2024 return as taxable. agree? Then, I think I need to amend the year 2024, right?

Appreciate your help.

[2Double]

@baldietax 

Thank you for your reply. I added an edit in my post.

I contributed to traditional IRA and did backdoor roth IRA conversion in March 2024 and filed that for 2023 which I think was correct and the amount in form 8606 was not taxable.

But the tax year 2024 I think has issue because the amount I contributed in 2023 shows in my 2024 return as taxable. agree? Then, I think I need to amend the year 2024, right?

Appreciate your help.

[DaveF1006 · Accepted solution]

It depends. Based on the line numbers and numbers you've provided, you have a missing "Missing Basis" error.

The core of the problem is that Form 8606, Line 2 on your 2024 return is currently Zero. For a Backdoor Roth to work correctly across two years, Line 2 for 2024 must show the non-deductible basis you established in 2023.

Yes, you do need to amend your 2024 return. Here are the steps you need to take to rectify this error.

1. Open your 2024 Return in TurboTax. 
2. Scroll down to the section titled "Your tax returns & documents."
3. Select year 2024
4. Click the link that says "Amend (change) return
5. Once you begin amending, Navigate to Wages & Income > IRA, 401(k), Pension Plan Withdrawals (1099-R).
6. Proceed through the screens after your 1099-R entry. Look for a screen that asks: "Any Nondeductible Contributions to your IRA?"
7. Select Yes.
8. On the next screen, it will ask for your "Total Basis as of December 31, 2023." Enter $6,490 (the amount from your 2023 Form 8606, Line 14).
9. Once you do this, TurboTax will recalculate Form 8606. Line 15c should drop to $0 (or close to it, if there were small earnings), and your "Refund" meter should increase because you're getting back the tax you overpaid on that $6,490.

If you use the software, you need the 2024 version of TurboTax. Once you open the return, go to other tax situations>amend return. Then perform the same steps given above.

[2Double]

@DaveF1006 Thanks a lot for your help.  So I only need to amend 2024 not 2023, correct? I contributed and did conversion both in March 2024 and reported for my 2023 return as it happened in the year 2023. Is that correct? I got confused because in another reply, it was mentioned contribution should be on 2023 but conversion on 2024. I guess this way I need to amend both 2023 and 2024. I appreciate your help. 

[DaveF1006]

Yes, you need to amend your 2024 return. You accidentally paid tax on money you already paid tax on because your 2024 Form 8606 did not "see" the basis you created in 2023.

You shouldn't need to amend your 2023 return. Your 2023 Form 8606 shows $6,490 on both Line 1 and Line 14, which sets your basis. As long as you didn’t take a deduction for that $6,490 on Schedule 1 (Line 20), your 2023 return looks good.