Question

backdoor roth tax help

Forum|Forum|6 years ago
May 28, 2020
1 reply
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I originally contributed $2400 to a Roth IRA in 2019 but ended up making more than the allowable amount so I recharacterized this to a rollover IRA which with interest was $2680. I also had a 403b from my previous employer ($5300) that I had converted and rollover as well as $700 of my post tax dollars converted and all put into a backdoor IRA. Now that I am doing taxes I don't know how to fill in the boxes. The $2400 and $700 are all post tax dollars whereas the $5300 that was converted from the 403b is pretax. Any help would be appreciated.

TurboTax Deluxe Online

macuser_22

Employee

This so-called “back-door Roth” method ONLY works if you have NO OTHER Traditional IRA accounts. If you do, then the non-deductible part must be spread over ALL accounts and cannot be withdrawn by itself. Only if you started with NO Traditional, SEP & SIMPLE IRA and ended up with a zero amount in ALL Traditional, SEP & SIMPLE IRA accounts will this Roth conversion not be taxable.

The fact that you have a rollover IRA means that a backdoor Roth will not work and only a portion will not be taxable.

Enter the Roth contribution is the IRA contribution section and then say yes, you "switched" to Traditional IRA (recharactorized). If asked, say that you want the entire contribution to be non-deductible.

Then enter the 1099-R for the distribution/conversion as below.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

You will be asked of you had and tracked non-deductible contributions - say yes. The enter the amount from the last filed 8606 form line 14 if it did not transfer. Then enter the total value of any Traditional, SEP and SIMPLE IRA accounts that existed on December 31, 2019.

That will produce a new 8606 form with the taxable amount calculated on lines 6-15 and the remaining carry-forward basis on line 14.

NOTE: If there is an * next to line 15 then 6-15 will be blank and the calculations will be on the "Taxable IRA Distributions worksheet instead.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**