non-deductible IRA contribution question

NotaCPA
NotaCPA Member Posts: 1 Newcomer
edited March 3 in General

In 2023, I made a non-tax deductible contribution to my traditional IRA. My broker said that I could recharacterize this contribution in which the $6500 would be returned and I would need to pay taxes on any gains, which I'm doing this year (it was comingled accidentally in pre-tax funds). I'm now going through the process of doing this year's backdoor ROTH IRA, and I have to answer the question of whether I have ever made non-deductible contributions before. I didn't receive a form 8606 in 2023. Should I answer yes, zero out the cost basis or answer no? I have a 2022 8606 with a cost basis, so I wasn't sure if I should include that figure.

Thank you for the help.

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Answers

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 545

    Hello NotaCPA,

    When you are going through the software and entering the 1099-R, after you are done, continue to the IRA Basis page and enter your basis in the IRA. That way your conversion will not be taxable. Later, you may need to amend your 2023 return to show the nondeductible contribution.

    I suggest you review this article about backdoor Roth conversions.

    I you need additional help contact Customer Support while signed into your account so a support specialist can review your account and assess your situation.

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