The best way to do a backdoor Roth is to do it “clean” by contributing *for* and converting in the same year — contribute for 2023 in 2023 and convert in 2023, contribute for 2024 in 2024 and convert in 2024, and contribute for 2025 in 2025 and convert in 2025. Don’t split them into two years such as contributing for 2022 in 2023 and converting in 2023 or contributing for 2023 in 2024 and converting in 2024. If you did a “clean” backdoor Roth and you’re using TurboTax, please follow How To Report Backdoor Roth In TurboTax (Updated).
However, many people didn’t know they should’ve done it “clean.” Some people thought it was natural to contribute to an IRA for 2023 between January 1 and April 15 in 2024. Some people contributed directly to a Roth IRA for 2023 in 2023 and only found out their income was too high when they did their taxes in 2024. They had to recharacterize the previous year’s Roth IRA contribution as a Traditional IRA contribution and convert it again to Roth after the fact.
When you contribute for the previous year and convert (or recharacterize and convert in the following year), you have to report them on your tax return in two different years: the contribution in one year and the conversion in the following year. It’s more confusing than a straight “clean” backdoor Roth but that’s the price you pay for not knowing the right way. This post shows you how to do the contribution part in TurboTax for the first year. The follow-up post Backdoor Roth in TurboTax: Recharacterize & Convert, 2nd Year shows you how to do the conversion part in TurboTax for the second year.
If you recharacterized your 2023 contribution in 2023 and converted in 2023, please follow Backdoor Roth in TurboTax: Recharacterize & Convert, Same Year.
I’m showing two examples — (1) a direct contribution to a Traditional IRA for the previous year; and (2) recharacterizing a Roth contribution for the previous year as a Traditional contribution. Please see which example matches your scenario and follow along accordingly.
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The screenshots below are from TurboTax Deluxe downloaded software. The downloaded software is way better than online software. If you haven’t paid for your TurboTax Online filing yet, you can buy TurboTax download from Amazon, Costco, Walmart, and many other places and switch from TurboTax Online to TurboTax download (see instructions for how to make the switch from TurboTax).
Contributed for the Previous Year
Here’s the example scenario for a direct contribution to the Traditional IRA:
You contributed $6,500 to a Traditional IRA for 2023 between January 1 and April 15, 2024. You then converted it to Roth in 2024.
Because your contribution was *for* 2023, you need to report it on your 2023 tax return by following this guide. Because you converted in 2024, you won’t get a 1099-R for your conversion until January 2025. You will report the conversion when you do your 2024 tax return. Come again next year to follow Backdoor Roth in TurboTax: Recharacterize & Convert, 2nd Year.
If you contributed to a Traditional IRA in 2023 for 2022, everything below should’ve happened in your 2022 tax return. In other words,
You contributed $6,000 to a Traditional IRA for 2022 between January 1 and April 15, 2023. You then converted it to Roth in 2023.
Then you should’ve gone through the steps below in your 2022 tax return. If you didn’t, you should fix your 2022 return. The conversion part is covered in Backdoor Roth in TurboTax: Recharacterize & Convert, 2nd Year.
If you’re married and both you and your spouse did the same thing, you must follow the same steps below once for you and once again for your spouse.
If you first contributed to a Roth IRA and then recharacterized it as a Traditional contribution in the following year, please jump over to the next example.
Contributed to Traditional IRA
Go to Federal Taxes -> Deductions & Credits -> Traditional and Roth IRA Contributions.
Check the box for Traditional IRA because you contributed to the Traditional IRA directly. See the next example if you contributed to a Roth IRA first and then recharacterized it.
TurboTax offers an upgrade but we don’t need it. Choose to continue in TurboTax Deluxe.
We already checked the box for Traditional but TurboTax just wants to make sure. Answer Yes here.
It was not a repayment of a retirement distribution.
Enter your contribution amount in both boxes. The first box says you contributed. The second box says you contributed in 2024, not in 2023.
Converted, Did Not Recharacterize
This is a critical question. Answer “No.” You converted the money, not switched or recharacterized.
You may not get this question if TurboTax sees that you’re covered by a retirement plan at work from Box 13 in your W-2. Answer yes if you’re covered by a retirement plan but the box on your W-2 wasn’t checked.
You have excess contributions only if you contributed over the limit. Don’t do that.
Basis
You can answer “No” if this is the first time you contributed to a Traditional IRA but answering “Yes” with a 0 has the same effect and it allows you to correct errors.
This is normally zero if this is the first time you contributed to a Traditional IRA. If you put in a number because you didn’t understand what it was asking, now is the chance to correct it.
Make It Nondeductible
TurboTax won’t show you this if it sees clearly that your income is too high to qualify for a deduction. If you see this question, it means you have the option to take a deduction or decline the deduction. Taking the deduction in 2023 will make your conversion in 2024 taxable. It’s simpler if you make your full Traditional IRA contribution nondeductible, and then your 2024 Roth conversion won’t be taxable. Enter the amount of your contribution in the last box. It was $6,500 in our example.
Your Traditional IRA deduction is zero, which is OK because it makes your conversion in 2024 not taxable.
Form 8606
Let’s take a look at Form 8606. Click on Forms on the top right.
Find “Form 8606-T” (and “Form 8606-S” for your spouse) in the list of forms in the left pane. You should see that only lines 1, 3, and 14 are filled in with your contribution amount. It’s important to see the number in Line 14. This number will carry over to 2024. It’ll make your conversion in 2024 not taxable.
Break the Cycle
While you’re at it, you should break the cycle of contributing for the previous year and create a new habit of contributing for the current year. Contribute to a Traditional IRA for 2024 in 2024 and convert in 2024.
You’re allowed to convert more than once in a single year. You’re allowed to convert more than one year’s contribution amount in a single year. Your larger conversion is still not taxable when you convert both your 2023 contribution and your 2024 contribution in 2024. Then you will start 2025 fresh. Contribute for 2025 in 2025 and convert in 2025.
Recharacterized Before Converting
Now let’s look at our second example scenario.
You contributed $6,500 to a Roth IRA for 2023 in 2023. You realized that your income was too high when you did your taxes in 2024. You recharacterized the Roth contribution for 2023 as a Traditional contribution before April 15, 2024. The IRA custodian moved $6,600 from your Roth IRA to your Traditional IRA because your original $6,500 contribution had some earnings. Then you converted it to Roth in 2024.
Because your contribution was for 2023, you need to report it on your 2023 tax return by following this guide. Because you converted in 2024, you won’t get a 1099-R for your conversion until January 2025. You will report the conversion when you do your 2024 tax return. Come back again next year to follow Backdoor Roth in TurboTax: Recharacterize & Convert, 2nd Year.
Similar to our first example, if you did the same in 2023 for 2022, you should’ve done everything below when you did your taxes for 2022. In other words,
You contributed $6,000 to a Roth IRA for 2022 in 2022. You realized that your income was too high when you did your 2022 taxes in 2023. You recharacterized the Roth contribution for 2022 as a Traditional contribution before April 15, 2023. The IRA custodian moved $6,100 from your Roth IRA to your Traditional IRA because your original $6,000 contribution had some earnings. Then you converted it to Roth in 2023.
Then you should’ve taken all the steps below last year in your 2022 tax return. If you didn’t, you need to fix your 2022 return. The conversion part is covered in Backdoor Roth in TurboTax: Recharacterize & Convert, 2nd Year.
Contributed to Roth IRA
Go to Federal Taxes -> Deductions & Credits -> Traditional and Roth IRA Contributions.
Check the box for Roth IRA because you originally contributed to a Roth IRA.
We already checked the box for Roth IRA but TurboTax just wants to make sure.
It was not a repayment of a retirement distribution.
Enter the amount of your original Roth contribution. It was $6,500 in our example.
Recharacterized
Now we confess that we recharacterized the contribution as a Traditional IRA contribution. Answer Yes here.
The amount here is relative to the original contribution amount. If you recharacterized the whole thing, enter $6,500 in our example, not $6,600 which was the amount with earnings that the IRA custodian moved into the Traditional IRA.
The IRS wants a statement to explain the recharacterization. Click on “Fill in Template.”
Fill in the dates of your original contribution and your recharacterization. The amount in the last box includes earnings. It’s $6,600 in our example.
Roth Basis
If you take up this offer from TurboTax to track your Roth IRA basis, it’s going to ask you questions about previous years, which is more trouble than it’s worth to me. I answered No. You don’t need to track your Roth IRA basis if you’re planning to withdraw from your Roth account only after age 59-1/2 and after you’ve had your first Roth IRA for five years. See Roth IRA Withdrawal After 59-1/2 in TurboTax.
No excess contributions.
Make It Nondeductible
TurboTax shows this only when it sees your income qualifies for a deduction. You have the option to take the deduction or decline the deduction. Taking the deduction in 2023 will make your conversion in 2024 taxable. It’s simpler if you make your full contribution nondeductible and then your 2024 Roth conversion won’t be taxable. Enter the amount of your original contribution in the last box. It was $6,500 in our example.
Your Traditional IRA deduction is zero, which is OK because it makes your conversion in 2024 not taxable.
Form 8606
Let’s take a look at Form 8606. Click on “Forms” on the top right.
Find “Form 8606-T” (and “Form 8606-S” for your spouse) in the list of forms in the left pane. You should see that only lines 1, 3, and 14 are filled in with your original contribution amount. After recharacterizing, it’s as if you contributed directly to a Traditional IRA in the first place. It’s important to see the number in Line 14. This number will carry over to 2024. It’ll make your conversion in 2024 not taxable.
Switch to Clean Backdoor Roth
While you are at it, you should switch to a clean backdoor Roth for 2024. Rather than contributing directly to a Roth IRA, seeing that you exceed the income limit, recharacterizing it, and converting it again, you should simply contribute to a Traditional IRA for 2024 in 2024 and convert it to Roth in 2024 if there’s any possibility that your income will be over the limit again.
You’re allowed to do a clean backdoor Roth even if your income ends up below the income limit for a direct contribution to a Roth IRA. It’s much simpler than the confusing recharacterize-and-convert maneuver.
You’re allowed to convert more than once in a single year. You’re allowed to convert more than one year’s contribution amount in a single year. Your larger conversion is still not taxable when you convert both your 2023 contribution and your 2024 contribution in 2024. Then you will start 2025 fresh. Contribute for 2025 in 2025 and convert in 2025.
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Ian says
Interesting update to this, I am doing the backdoor roth for TY 2023 between Jan 1 and Apr 15 2024. I opened a traditional IRA in M1 and funded 6500, opened an empty roth , and requested a conversion. M1 told me they would issue a 1099R still in May for this.
Do I use this method still or do I go back to this method https://thefinancebuff.com/how-to-report-backdoor-roth-in-turbotax.html
Harry Sit says
The 1099-R to be issued will still be a 2024 1099-R. You still do it split-year – the contribution now and the conversion next year by following the “2nd year” post.
Jing says
This is very helpful. I forgot to contribute the in 2023, and now I am following your first example that contributing 2023 IRA in 2024 and convert in 2024. In step make it non-deductible, turbo tax mentioned that there is certain amount, say $1000, that is eligible for deduction, then I enter the full contribution amount of $6,500. When I ran the federal return check in turbotax, it said the non-deductible amount should not exceed $1000 in the IRA contribution worksheet. I checked the wks, it seems that wks is only for our own record, and the form 8606 shows the full amount. I guess this should be alright, right since we dont need to file the wks. Thanks
Harry Sit says
It’s just saying that out of the $6,500 contribution, $5,500 is not deductible no matter what. Your choice is only on that $1,000. You can make part of the $1,000 nondeductible. It can be $0 (deduct $1,000), $100 (deduct $900), or $1,000 (deduct nothing). Just enter $1,000 when you want 100% of your contribution nondeductible.
Cari says
For TY 2023, I contributed $3000 directly to my Roth IRA. Subsequently, I learned I’ll be over the income limit. I did a backdoor Roth IRA for the remaining $3500 from trad IRA to Roth IRA.
1/2024 I requested a recharacterization of the $3000 (at a loss).
Do I still fill out just the Roth IRA portion of turbo tax or select both the Roth IRA and traditional IRA and fill that out? I think in my scenario, since I contributed to both the Roth IRA and trad IRA, I would need to select both. Please give some guidance, thank you.
Harry Sit says
You need to select both. Follow this post with regard to the $3,000. Follow How To Report Backdoor Roth In TurboTax for the other $3,500. Next time just go through the backdoor 100% if there’s a chance that your income comes close to the limit.
Josh says
I funded a Traditional IRA with $6.5k via Vanguard on 4/9/24 for 2023 (and have since been averaging ~$25-30/month interest in MM). I maxed out my 401k but had no other retirement account activity in 2023. I do have an H.S.A. which was also maxed out (employee and employer combined) for 2023.
I historically used TurboTax (TT) to file for over a decade but switched to Cash App beginning with 2022’s returns. I also filed 2023 with CashApp and recall receiving a notification that I was not eligible for any deductions for the $6.5k Trad IRA contribution in mid-April. When I log in to CashApp to review my returns, I only see my federal and state (GA) returns with neither reference to Form 8606 nor Form 8606 itself. I do recall entering the information from Form 5498 via Vanguard; however, I believe that’s when I received the notification that I wasn’t eligible for any deduction. I did print the notification to a PDF and see Form 8606 (page 2 after “IRA Deduction Worksheet—Schedule 1, Line 20”) with $6,500 on rows 1, 3, and 14. I don’t see any reference on my 1040 anywhere, though – even when checking the 2023 transcript on IRS.gov.
Other related context: 1) This is the only money I’ve ever added to any traditional IRA; 2) I have an existing $60k+ Roth IRA with Vanguard but haven’t contributed to it in years because of income level; and 3) I see a button to “Convert to Roth IRA” in my Vanguard user interface but am wondering if I should amend 2023 first.
Based on the above context, could someone please help me understand whether I should: 1) Go ahead and contribute for 2024 and convert the entire balance at once for both 2023 and 2024; 2) convert the 2023 amount contributed in April 2024 and then do both steps for 2024 well before 12/31/2024 (after waiting for the funds to settle for 2024 prior to converting its sole balance); or 3) amend 2023’s returns with whatever updated forms need to be added (i.e., 8606, etc. and then proceed with aforementioned steps 1 or 2).
Any feedback, suggestions, and/or additional approaches/insight would be highly welcomed and appreciated. I’ll absolutely be picking up TT desktop software from Sam’s or Costco for filing 2024 as the extremely helpful write-up suggests.
Thanks so much!
Josh
Harry Sit says
I don’t have Cash App Taxes. Tax software usually has an option to produce a complete return as a PDF that includes all the forms and schedules. If you see Form 8606 in your complete return PDF, it means the software already included it in the efile. If you don’t see it, you still don’t need to amend your tax return, because adding a Form 8606 doesn’t change anything else in your return. You can download Form 8606 from the IRS website and fill it out manually. You only need your information at the top and $6,500 on lines 1, 3, and 14. Mail it to the IRS address based on where you live. Attach a letter to say this form was omitted in the efile and it doesn’t change anything else in your return.
For 2024, just contribute for 2024 and convert the entire balance for both 2023 and 2024 well before 12/31/2024. Converting separately doesn’t help with anything.
Kevin says
I contributed to a non deductible traditional IRA in 2019 but didn’t do the conversion because I couldn’t do so cleanly. I will now be able to do so cleanly this year, so I planned on converting that 2019 contribution this year in 2024.
After downloading my 2019 return from TurboTax, it appears I may not have entered the contribution in TurboTax that year. At least, I don’t see a form 8606 as part of my tax return. And it looks like I can’t amend a return from before 3 years ago. I thought I would have entered it in TurboTax but I don’t see how I can go into my 2019 return in TurboTax to see what I entered. Maybe I need to download the .tax file and open it in TurboTax desktop version?
It’s my understanding I can still just submit a form 8606 for prior year contributions without amending a return but I’m wondering about how I would now handle the conversion to Roth IRA in TurboTax for 2024 taxes since it appears I may not have done the first part.
Harry Sit says
You need Split-Year Backdoor Roth IRA in TurboTax, 2nd Year when you convert a 2019 contribution (plus earnings) in 2024. Enter the contribution amount (without earnings) in “Let’s Find Your Basis.” TurboTax would auto-populate it for you if you did the first part, but you can enter it yourself if TurboTax doesn’t.