Backdoor Roth IRA TurboTax

Step-by-Step Guide:

Doing a backdoor Roth conversion is a three-step process with TurboTax.

Step 1:  Enter the Non-Deductible Contribution to a Traditional IRA

  1. Sign in to your TurboTax account
  2. Open your return if it’s not already open
  3. Select Federal from the menu, then Deductions & Credits
  4. Locate the Retirement and Investments section and select Show more
  5. Select Start or Revisit next to Traditional and Roth IRA Contributions
  6. Check the Traditional IRA box and select Continue
  7. Answer No to the question, Is This a Repayment of a Retirement Distribution?
  8. On the screen, Tell Us How Much You Contributed, enter the amount contributed and select Continue
  9. Answer No on the screen Did You Change Your Mind?… then answer the questions on the following screens
  10. When you reach the Choose Not to Deduct IRA Contributions screen, select Yes, make part of my IRA contribution nondeductible, enter the amount you contributed, then select Continue
  11. Select Continue on Your IRA Deduction Summary

Step 2:  Enter the Conversion from a Traditional IRA to a Roth IRA

  1. Select Wages & Income (this is Income & Expenses in TurboTax Self-Employed)
  2. Locate the Retirement Plans and Social Security section and select Show more, then select Start or Revisit next to IRA, 401(k), Pension Plan Withdrawals (1099-R)
  3. Answer Yes to Did you get a 1099-R in 2022?, then Continue
    1. If you land on the screen, Your 1099-R Entries, select Add Another 1099-R
  4. Select how you want to enter your 1099-R (import or type it in yourself) and follow the instructions
  5. Answer the questions on the following screens, until you reach Tell us if you moved the money through a rollover or conversion
  6. Select I converted some or all of it to a Roth IRA and Continue

Step 3: Ensure the above steps were completed properly by checking your work!

  1. From the menu, select Tax Tools, then Tools (If you’re currently using the TurboTax Mobile app, you’ll need to sign in to the web browser version)

If your conversion contains contributions made in 2022 for 2021

If your conversion includes contributions made in 2022 for 2021, you’ll need to check your 2021 return to make sure it includes Form 8606, and Nondeductible IRAs.

If this form isn’t included in your 2021 return, you’ll need to fill out a 2021 Form 8606to record your non-deductible basis for conversion and mail this form to your designated IRS office. 

Don’t amend your 2021 return to record your basis.

(Note: If you are required to file Form 8606 to report a nondeductible contribution to a traditional IRA, but don’t do so, you’ll be subject to a $50 penalty. This penalty can be waived if you can show reasonable cause.)