Back-door roth

[cthomas428]

My client contributed $6000 to a Non-deductible traditional IRA in 2021 and immediately converted it to a Roth (so-called back-door Roth). She has no other IRAs. As expected, the 1099-R shows Code 2. The box is checked "Taxable amount not determined". And I checked the B-5 box at the bottom of 1099-R to show the entire amount had been converted to a Roth.

I have done these in the past (2019) and everything worked out fine.  But for this 2021 tax software, the entire amount continues to show up as taxable, no matter what I do.

What am I missing? Is it a quirk in the software (or a quirk in me?)  

Thanks for any pointers!

[Just-Lisa-Now-]

Did you enter the IRA contribution yet?

[cthomas428]

Yes I did. 

[rbynaker]

Maybe check your TSJ codes?  What does your 8606 look like?  Does it show the non-deductible contribution?

[qbteachmt]

This article has an image showing the Form 8606, for reference, as Backdoor Roth:

https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/

[cthomas428]

Yes it does and in fact, line 15c shows the taxable portion to be 0. Yet, on the 1040 it is showing upas taxable. Also on the IRA worksheet, it shows it as a taxable Roth conversion. Really flummoxed on this.  The only way I can make it show up on nontaxable on the 1040 is to leave the 1099-R, line 2a blank.

[cthomas428]

Also, I should add that the 0 on line 15 does not have an asterik * (as it should) and Part II, lines 16, 17 and 18 are blank - nor can I get the Taxable IRA Distribution Smart Worksheet to populate.

[rbynaker · Accepted solution]

Is the IRA box checked on your 1099-R Wks?

[rbynaker]

You might have to enter 0 as year-end FMV somewhere (at this point I'm just grasping at straws).

[cthomas428]

Oh that's it - you are a brilliant problem solver! Thank you so much.

[rbynaker]

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@cthomas428 wrote:

Oh that's it - you are a brilliant problem solver! Thank you so much.

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Or at least I've made that mistake so many times it stuck in my brain somewhere.  Glad we could help.