turbortax has bugs in non-deductible ira backdoor conversion

[solow2012]

Hi, I found TurboxTax has bugs in ira backdoor conversion 8086 form. 

Context

both I and my wife had 6000 tradatinoal IRA contribution, and then immeidately converted them to ROTH ira in 2022.  The turbotax generated incorrect forms  either 

1) wrong message excessive contribution, penaty 

2) did not have line 8 ( conversion 6000 to ROTH) in 8086

Details 

Deduction sections.

1) how much you contributed,   traditional ira 6000,  0 for 1/1/2023 to 4/18/2023

2) tell us how much you transferred 0

3) any nondeductible contribution to IRA.  No, did not track non-deductible contributions 

4) entiehr your roth contributions: 0

8606 forms

line 1: 6000

line 8: missed

Line 14: 6000 ( should be 0)

2nd filling method

2) tell us how much you transferred 0 -> 6000

turbox tax says:  you made an excessinve contributions of 6000,0 to Roth IRA. 

[DanaB27]

You do not enter the conversion in the deduction section. The "Tell us how much you transferred" screen is for recharacterizations. Did you convert the funds in 2022? Then you should have a 2022 Form 1099-R which you will enter into TurboTax for your 2022 tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Click "I'll Type it Myself"
6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
7. Click "Continue" and enter the information from your 1099-R
8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
9. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
10. On the "Your 1099-R Entries" screen click "continue"
11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
12. Answer the questions about the basis from line 14 of your 2022 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

Please review How do I enter a backdoor Roth IRA conversion?

[solow2012]

Hi Thank you, 

I tried 

> 9 Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"

When I choose, my refund reduced a lot

[solow2012]

I did this, still missed line8 of 8606: 6000, and line 14 as 6000.

fedral return

1. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"

dedutction

Deduction sections.

1) how much you contributed,   traditional ira 6000,  0 for 1/1/2023 to 4/18/2023

2) tell us how much you transferred 0

3) any nondeductible contribution to IRA.  No, did not track non-deductible contributions 

4) entiehr your roth contributions: 0

[DanaB27]

What is on line 13? Do you have a star next to line 13? If yes, then TurboTax uses the Taxable IRA Distribution Worksheet to calculate the taxable part and line 6 to 12 will be empty on Form 8606.

Was the value of all traditional, SEP, and SIMPLE IRAs on December 31, 2022 more than $0? If yes then the pro-rata rule applies. This means that with each distribution/ conversion you will have a taxable and nontaxable part.

If this does not solve the issue  the it would be helpful to have a TurboTax ".tax2023" 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 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. 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.