Been following this forum for a while, but my first post here. I'm doing my taxes (Turbotax) for this year, and seemed to have run into an issue where Turbotax wants me to pay tax on a backdoor Roth. I'm doing the backdoor Roth because I didn't qualify due to the MAGI limits starting in 2011. Here's my situation with approximate numbers:
2011: $4k into traditional IRA - kept in this account and not converted. (non-deductible contribution for me, and never had a traditional IRA before)
early 2012 $5k into traditional IRA. Total balance now $9k
mid-2012: Converted the $9k (the $4k 2011 contribution and $5k 2012 contribution) from the traditional IRA to an existing Roth.
I have no other distributions during the year.
I've been following the instructions on the forum on reporting on a backdoor conversion, but my situation seems a bit different since I'm converting a 2011 and 2012 contribution, and it's not working out for me.
When calculating, Turbotax wants me to pay tax on the $5k difference. Is this correct? It doesn't seem right... since the $4k 2011 TradIRA contribution was already post-tax money and I never received a deduction for it. Does that also mean I should always convert in the same year as the contribution?
Thanks, would welcome the help.