How to Report Backdoor Roth with a Rollover With Basis?

Gene15rtaor5

New user to the software and hoping for some guidance.

My employer allows for After tax contributions in my 401k. Last year I did 5k in after tax contributions of which I rolled them all to my Traditional IRA. I received a 1099-R for this which shows a 5,100 rollover and that only $100 is taxable for the gain.

I then took these funds with my yearly IRA and did a back door conversion to my Roth. I now have another 1099-R showing a 12k conversion. I had non deductible contributions to the 401k for 7k so now the system is calculating I have tax on the 5k that originally came from the 401k.

How do I enter this to correctly reflect I should only have tax on the $100? I already paid tax on 5k. In prior year my traditional balance was $0 so I can’t offset there and I also can’t put I had 12k of contributions.

Hoping that made sense and someone can help guide me.

rachels

Hi Generator515,

You'd typically enter the second 1099-R as you received it. Then, on the following screens, it will ask about the basis in that account. So, if you had a basis because of the $5k rollover, you would typically include that additional $5k as part of the basis for the conversion when asked about your prior year IRA basis amounts. That screen will show up if you do the following:

1. Go to Income > Retirement Income (1099-R). 
2. Click the blue "Continue" button on the screen that comes up.
3. Save and Continue until you reach the screen titled, "Prior Year IRA Contributions."
4. On that screen, if you answer YES, you will be asked for the basis in your traditional IRA. The basis in your traditional IRA will typically include the post-tax contribution amounts you've made to traditional IRAs in previous years."

If you made a traditional IRA contribution amount for 2024 and reported that on the Deductions/Credits > IRA Contributions screen, any basis from that current-year contribution should already be taken into consideration for the conversion, and you would not add that again on the screen from the above steps.

If you end up having trouble with specific screens as you enter that in your account, you can always contact our Support team from within your account, since they will be able to view your account specifics.