Total Basis for Backdoor Roth IRA

Forum|Forum|1 year ago
March 14, 2025
1 reply
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For the last 4 years, I have been performing backdoor Roth IRA.

I contributed the max allowed ($6500/$7000) AFTER-TAX dollars to Traditional IRA, and then converted all of that to Roth IRA each year. I have an $ amount in Total Basis (including in prior returns). Should the Total Basis always be $0? Have I been doing it wrong all these years?

Not A Product Question

DanaB27

If you make the nondeductible contribution and a full conversion in the same year then your basis on line 14 should be $0. The only exception would be if had a loss before you converted the funds then it is possible to have a basis on line 14.

If you made the contribution for the previous year and the convert it in the current year then you would have a basis on line 14 on the previous Form 8606 that would be carried over to line 2 of the current Form 8606.

Note, this assumes your traditional IRAs were empty before starting the backdoor Roth procedure.

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Employee

"Have I been doing it wrong all these years?"

Not if you noticed that you are paying tax on the taxable part of those conversions. (Form 1040 Line 4b)

@himanshu983

himanshu983Author

I make after-tax dollar contributions (up to annual limit) to Traditional IRA, and then move all of it to Roth IRA after a few days. I have been doing this for a few years. So should there be a taxable part?