Question

Turbotax is populating From 8606 Incorrectly

Forum|Forum|1 year ago
February 28, 2025
1 reply
0 views

I noticed that TurboTax is not populating any values in part 1 of the form 8606 and only showing $7000 on line 16 and 18 of part 2, making $7000 taxable income when it was actually a backdoor Roth IRA conversion. I tried multiple things like re-uploading the form 1099-R, watched multiple youtube videos and followed the correct steps but though, at the end, it shows "Your IRA Deduction : $0", it doesn't populate anything on line 1,3,5,8,13. To double check if I am doing something wrong, I entered the same data in FreeTaxUSA and it is generating the form 8606 correctly. That confirms it that there is a bug in TurboTax. I talked to their support team, and they couldnt help me and want me to buy expert review service. Like really!!! PLEASE FIX THE BUG!!! and dont charge extra for it!

D

DanaB27

Did you have a prior year basis from 2023? If yes, then please see Why am I unable to report my 2023 for 8606 basis?

If you only made a nondeductible traditional IRA contribution for 2024 and don't show an entry on line 1 of Form 8606 then it would be helpful to have a TurboTax ".tax2024" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Online:

From the left menu select Tax Tools.
Then select Tools below Tax Tools.
A window will pop up which says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number.
Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.

The instructions for TurboTax Download:

On your menu bar at the very top, click "Online"
Select "Send Tax File to Agent"
Click "Send"
The pop-up will have a token number
Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

S

Sharon2938Author

I appreciate you for responding. Here's the token number : 1280979 @DanaB27

D

DanaB27

Thank you, I reviewed your return. You entered a recharacterization in the IRA contribution section. A conversion is not a recharacterization. Please, see the instructions below and remove the recharacterization with step 7.

To enter the nondeductible contribution to the traditional IRA:

Login to your TurboTax Account
Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed
On the "Tell us how much you transferred" screen remove the entry for the recharacterization
Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
Enter your basis in the Traditional IRA from your 2023 Form 8606 line 14 (if you had a basis in the prior year)
On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

Please note lines 6 to 12 are empty on Form 8606 since TurboTax is using the Taxable IRA Distribution Worksheet to calculate the nontaxable part on line 13 as indicated by the *. It seems you had a pre-tax balance at the end of the year and therefore the pro-rata rule applies and each each distribution/ conversion you will have a taxable and nontaxable part. You can see the remaining basis on line 14 of Form 8606, this basis can be carried forward.

To clarify, you made a traditional IRA contribution in 2024 for 2024 and then converted this amount right away in 2024? Did you have any other pre-tax funds in all of your traditional/SEP/SIMPLE IRA account? Because if not then your balance at the end of the year should be $0. Please check your end of the year statement to verify your balance on December 31, 2024 and edit you entry if necessary (step 7 below).

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Click "Continue" and enter the information from your 1099-R
Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
On the "Review your 1099-R info" screen click "Continue"
Answer "Yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs