What to enter for question: "Any Nondeductible Contributions to IRA?"

[dhuynh44]

Hi all,

I do backdoor conversions every year from Traditional IRA to Roth IRA.  In the beginning of year 2022 I had a balance in my traditional of $500 from year 2021.  I also contributed $2920 in 2022 for year 2021.  I then contributed $6000 for year 2022.  All of this was converted in year 2022 for a total of $9420 which was reflected correctly on my 1099-R of conversions from Traditional to Roth.

Quick question.  Under the portion of entering 1099-R there is a question "Any Nondeductible Contributions to IRA?"  Do I simply enter line 14 from 8606 from tax year 2021?  Or would this amount be $0 because everything is now $0 in my traditional at end of year 2022?

Also, when I enter my 1099-R for these conversions it adds a tax burden even though I shouldn't be paying any taxes on these.  Will this amount change later in Turbotax when I fill out "Deductions and Credits?"  Thank you

[JohnB5677]

Based on what you've said, you do not have any Nondeductible Contributions.  You had $3420 for 2021 and $6,000 for 2022, both fall within the contribution limits.  As a result, you reduced your income, or basically got a tax deduction for those contributions.  So, when you convert it to a ROTH the IRS wants the tax that you didn't pay earlier, and in this case the entire distribution is taxable.

Based on what you've shared with us, you did not have "Any Nondeductible Contributions to IRA?"; therefore, that entry should be zero.

To address your final question.  The full amount of your transition from a Traditional IRA to a ROTH is taxable.  You will have taxes assessed on the ROTH contribution because of the issue stated above.  However, the ROTH contribution and any growth will not be taxed again.

[dhuynh44]

@JohnB5677 

Thanks for the response.  I’m a bit confused, or maybe I wasn’t clear on my text.  I had contributed my AFTER tax dollars to the traditional IRA, then converted this amount to Roth.  I thought doing this should not tax this amount so it was being converted?   The TurboTax program says “Good news you don’t have to pay additional tax on this amount”.  However when I input my 1009-R it adds a tax burden to my total.  Would this amount decrease after I finish my “deductions and credits section”?

It wouldn’t make sense for me to pay taxes on my income, convert it to a Roth IRA but pay additional taxes on it?

Hence my question at the part “Any Nondeductible Contributions to IRA?”  I did contribute $6000 for year 2022 but this was then all converted to Roth.  From my previous 2021 on line 14 8606 I have the amount of $2722.  When it asks “Any Nondeductible Contributions to IRA?” it mentions to enter the amount on line 14 from the most recent 8606.  

Can someone please help clarify this for me?  Thank you!

[JohnB5677]

I apparently did misinterpret your statement.  There is no indication in the text that the contributions were Non-Deductible.  If you don't have another retirement vehicle at work, the first $6,000 to your traditional IRA is deductible.  However, if you're confident they were after tax dollars, you can claim them as “Any Nondeductible Contributions to IRA?”

Please be cautious and confirm that you did not get the tax deduction.  If you've posted the traditional IRA to your 2022 tax return, please follow these steps to see your return.

1. On the menu bar on the left that shows.
   1. My Info
   2. Federal
   3. State
   4. Review
   5. File
2. Select Tax Tools
3. On the drop-down select Tools
4. On the popup menu
5. Select View Tax Summary
6. On the left sidebar
7. Select Preview my 1040.

• Line 31 of the 1040 would include the IRA contribution.
• The contribution would be identified on Schedule 3 Line 4.
• Schedule 3 is at the very end of the 1040 packet you are looking at.

[dhuynh44]

@JohnB5677 

Hi, yes I do have a 401k already.  I am trying to do backdoor Roth bc of our high income.  I contributed $6000 after tax dollars to traditional, and converted this whole amount to a Roth IRA.  

But at the question “Any Nondeductible Contributions to IRA?” Am I supposed to put line 14 from 2021 8086 like it states in TurboTax or do I put a different amount in this section?  

i think it would be either $0 (since I converted this whole amount, or the $2772 listed on my line 14 of my 2021 8606.   Can someone please clarify?

thank you!

[MaryK4]

Since you contributed to the traditional IRA to backdoor the Roth for tax year 2022, you want to indicate the $6,000 is the nondeductible contributions - since you will not be taking the deduction on your 2022 tax return.  The $2772 on your 2021 8606 must be for past contributions.  (IF you did not send the $6000 to Roth and did not deduct the $6000 in 2022 it would be added to the 8606 to increase the basis of your traditional IRA.

[dhuynh44]

@MaryK4 

thank you.  I think that’s where I’m confused.  When it asks the question “any nondeductible contributions to you IRA?”  it also says this is not typical and should be line 14 of 2021 8606.  So what am I putting here at this question?  Do I put the $6000 I contributed in year 2022, or the amount in line 14 of 2021 8606?

If my balance in my traditional was $500 at end of year 2021 and $0 at end of year 2022 but my line 14 of my 2021 8606 was $2772, would this actually be possible considering what I did in previous years?  Or should line 14 reflect what balance I have in traditional at the end of the year?  I aim to empty my traditional every year but 2021 I had $500 leftover

thank you

[MaryK4]

It sounds like your 8606 may be off- if you look at the form, you would have the $6000 for 2022 on Line 1 and Line 8 and if there was only $500 at the end of 2021, that is the amount that should have been carried forward.  See Form 8606.  You may want to see if you can get a copy of the tax returns for the last few years to see if you can find the first date the $2772  came from.  You can always correct it if you have to.  @dhuynh44 

[dhuynh44]

@MaryK4 

hey, this is actually a continuation of the brain cluster problem I had last year where I double recharacterized $1000 or so.  I actually recharacterized this twice by accident and it got reported on my tax forms so I ended up with a basis.  is it even possible to have a basis (line 14) that doesn’t match the actual amount leftover in my traditional?  I feel that I have reported all numbers to the best that I can with advice from experts and this is what happened.

if you want to take a look the topic is below:

https://ttlc.intuit.com/community/taxes/discussion/re-please-help-converted-non-deductible-tradition...

[dmertz]

"Do I simply enter line 14 from 8606 from tax year 2021?

Yes, that's your basis carried into 2022 from 2021 and is the amount that should already have been present for your basis in nondeductible traditional IRA contributions from prior years as a result of importing your 2021 TurboTax tax file into 2022 TurboTax.