Backdoor Roth / Turbotax questions

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splim
Posts: 1
Joined: Mon Mar 12, 2018 5:44 pm

Backdoor Roth / Turbotax questions

Post by splim » Mon Mar 12, 2018 6:24 pm

I can't seem to find the answer on this forum despite numerous searches so here goes.

Started doing the backdoor Roth contribution/conversions in 2014. The problem is that I did this in early 2015 for tax yr 2015.
So here's the question. Will I always have a basis on line 14 of my 8606 until I do the contribution and conversion in the same calendar yr?

My specific scenario:
for tax yr 2014: did backdoor roth in early 2015 (before tax day). reported the contribution on my 8606 but no conversion for 2014 (since it didn't occur until calendar year 2015). IRA basis is 5500 for 2014 (line 14) according to this form.
tax yr 2015: backdoor roth again in early 2016 (before tax day). partner failed to file the 8606 so I'm amending the taxes now. Followed the finance buff instructions for turbotax (reporting contribution for 2015 but conversion for 2014). Seeing my IRA basis line 14 on 8606 is still 5500? (11k - 5500 for the conversion). Do I just change this manually to 0??
tax yr 2016: backdoor roth again in early 2017 (before tax day). since no 8606 was filed in 2015, i'm seeing my 2015 basis was 0 and I reported my contribution for 2016 but my conversion for 2016 (since it was done in 2016). Is this ok or does this need to be amended with the 2015 basis?

The finance buff turbotax tutorial implies that my basis after the 1099-R forms are supposed to be 0. I don't have any money in tIRAs at the end of any given calendar yr- everything is in my 401k or in the roth after conversion. I'm just confused as to how to report all this properly. I'm thinking after amending my 2015 I need to amend 2016 with the basis from the amended 2015 so that this year I can do my backdoor roth contribution and conversion in the same year and make my life easier for the future (this year I will have 5500 contribution but 11k conversion since my 2017 conversion happened in 2018 as well). I just want to make sure this all adds up so that I can do this properly this year and not have to pay double taxes later on on my hard earned money!

Thanks everyone!

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FiveK
Posts: 4860
Joined: Sun Mar 16, 2014 2:43 pm

Re: Backdoor Roth / Turbotax questions

Post by FiveK » Mon Mar 12, 2018 7:38 pm

If I understand correctly what was done, and making some guesses at the actual amount converted each year (line 8), the various forms 8606 would be as shown below. Does that make sense (because maybe I didn't understand correctly...)?

Code: Select all

Form 8606				2014	2015	2016	2017	2018	2019
1	Nondeductible contributions	5500	5500	5500	5500	5500	5500
2	tIRA basis			0	5500	5500	5500	5500	0
3	Add lines 1 and 2		5500	11000	11000	11000	11000	5500
4	Contributions made next year	5500	5500	5500	5500	0	0
5	Line 3 minus Line 4		0	5500	5500	5500	11000	5500
6	EOY tIRA balance		0	0	0	0	0	0
7	non-conversion tIRA distrib.	0	0	0	0	0	0
8	t->R conversion			0	5500	5502	5500	11004	5505
9	Add lines 6, 7, and 8		0	5500	5502	5500	11004	5505
10	Divide line 5 by line 9		1.00000	1.00000	0.99963	1.00000	0.99963	0.99909
11	Line 8 * line 10		0	5500	5500	5500	11000	5500
12	Line 7 * line 10		0	0	0	0	0	0
13	Add lines 11 and 12		0	5500	5500	5500	11000	5500
14	Subtract line 13 from line 3	5500	5500	5500	5500	0	0
15	Taxable amount			0	0	0	0	0	0
16	From line 8			0	5500	5502	5500	11004	5505
17	From line 11			0	5500	5500	5500	11000	5500
18	Taxable amount			0	0	2	0	4	5

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