2018 Trad IRA contribution made in 2019 for back door Roth?

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Southernbelle
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Joined: Tue Dec 26, 2017 9:03 pm

2018 Trad IRA contribution made in 2019 for back door Roth?

Post by Southernbelle » Fri Apr 12, 2019 4:40 pm

Made my 2018 Trad IRA contribution for back door Roth conversion in 2019. How do I include this amount in my 2018 taxes? I don't have a 1099 yet since it was just made a few months ago.

jebmke
Posts: 8927
Joined: Thu Apr 05, 2007 2:44 pm

Re: 2018 Trad IRA contribution made in 2019 for back door Roth?

Post by jebmke » Fri Apr 12, 2019 4:44 pm

Southernbelle wrote:
Fri Apr 12, 2019 4:40 pm
Made my 2018 Trad IRA contribution for back door Roth conversion in 2019. How do I include this amount in my 2018 taxes? I don't have a 1099 yet since it was just made a few months ago.
Unless it is eligible for the savers credit, all you need to do is file Form 8606 with your return to declare the basis for this non-deductible IRA. If you are eligible for the savers credit, you need to include Form 8880.

Around the end of January, 2020 you will get a 1099-R for the conversion to a Roth IRA assuming you make that conversion this year.
When you discover that you are riding a dead horse, the best strategy is to dismount.

Topic Author
Southernbelle
Posts: 4
Joined: Tue Dec 26, 2017 9:03 pm

Re: 2018 Trad IRA contribution made in 2019 for back door Roth?

Post by Southernbelle » Sun Apr 14, 2019 4:03 pm

jebmke wrote:
Fri Apr 12, 2019 4:44 pm
Southernbelle wrote:
Fri Apr 12, 2019 4:40 pm
Made my 2018 Trad IRA contribution for back door Roth conversion in 2019. How do I include this amount in my 2018 taxes? I don't have a 1099 yet since it was just made a few months ago.
Unless it is eligible for the savers credit, all you need to do is file Form 8606 with your return to declare the basis for this non-deductible IRA. If you are eligible for the savers credit, you need to include Form 8880.

Around the end of January, 2020 you will get a 1099-R for the conversion to a Roth IRA assuming you make that conversion this year.
Thank you! Then do I need to enter the 1099-R in turbo tax next year?

jebmke
Posts: 8927
Joined: Thu Apr 05, 2007 2:44 pm

Re: 2018 Trad IRA contribution made in 2019 for back door Roth?

Post by jebmke » Sun Apr 14, 2019 4:25 pm

Yes, when you do your taxes for 2019 you will get and enter a 1099-R. You will want to make sure a form 8606 is filled out properly so that the amount of basis (what you contributed in 2018) is excluded from income in 2019.
When you discover that you are riding a dead horse, the best strategy is to dismount.

Topic Author
Southernbelle
Posts: 4
Joined: Tue Dec 26, 2017 9:03 pm

Re: 2018 Trad IRA contribution made in 2019 for back door Roth?

Post by Southernbelle » Sun Apr 14, 2019 4:25 pm

jebmke wrote:
Fri Apr 12, 2019 4:44 pm
Southernbelle wrote:
Fri Apr 12, 2019 4:40 pm
Made my 2018 Trad IRA contribution for back door Roth conversion in 2019. How do I include this amount in my 2018 taxes? I don't have a 1099 yet since it was just made a few months ago.
Unless it is eligible for the savers credit, all you need to do is file Form 8606 with your return to declare the basis for this non-deductible IRA. If you are eligible for the savers credit, you need to include Form 8880.

Around the end of January, 2020 you will get a 1099-R for the conversion to a Roth IRA assuming you make that conversion this year.

Thank you again for the help! To clarify, I put $2000 in my back door Roth IRA April 2018 for 2017 tax period. We put the $2000 on our 2018 taxes under a 8606. Now we received a 1099-R for the $2000. I contributed $5500 in January 2019 for the 2018 tax period for my Roth conversion.
So I’m confused as to how I list this for our 2018 taxes since the $2000 was listed on the 8608 in 2017. Do I ignore the 1099-R for 2018 for the $2000 since it was already submitted in 2017 taxes as a 8606? And do I put the $5500 I contributed for 2018 as a 8608 on our 2018 taxes?

jebmke
Posts: 8927
Joined: Thu Apr 05, 2007 2:44 pm

Re: 2018 Trad IRA contribution made in 2019 for back door Roth?

Post by jebmke » Sun Apr 14, 2019 4:36 pm

There is no such thing as a "back door Roth IRA"

It sounds like you made a deductible contribution to a Traditional IRA for 2017 (in 4/18) and then did a conversion to a Roth shortly thereafter. If so, you should have completed a form 8606 for 2017 when you did your taxes for 2017. Then when you did your 2018 taxes, you report the 1099-R and file another 8606.

The 8606 filed with your 2018 taxes will show the amount from rolling out to the Roth AND the amount contributed to the Traditional IRA (for 2018) that will be converted to a Roth (this year).

Form 8606 is an informational form that tracks the basis of your IRAs. Form 8606 is prepared by you. The 1099-R is the form issued by the custodian that reports the distribution from the Traditional IRA as it is converted to a Roth IRA. Tracking the basis in and out of the Traditional IRA makes sure you don't end up paying tax on the distribution of the Traditional IRA.

Form 8606 is a cumulative form from year to year so if you did not complete one in 2018 for 2017 then you need to do that first as it will be the starting point for activity related to the contributions and distributions for tax year 2018.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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FiveK
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Re: 2018 Trad IRA contribution made in 2019 for back door Roth?

Post by FiveK » Sun Apr 14, 2019 11:13 pm

Southernbelle wrote:
Sun Apr 14, 2019 4:25 pm
Thank you again for the help! To clarify, I put $2000 in my back door Roth IRA April 2018 for 2017 tax period. We put the $2000 on our 2018 taxes under a 8606. Now we received a 1099-R for the $2000. I contributed $5500 in January 2019 for the 2018 tax period for my Roth conversion.
So I’m confused as to how I list this for our 2018 taxes since the $2000 was listed on the 8608 in 2017. Do I ignore the 1099-R for 2018 for the $2000 since it was already submitted in 2017 taxes as a 8606? And do I put the $5500 I contributed for 2018 as a 8608 on our 2018 taxes?
You might enter your transactions on the 'Form8606' tab of the personal finance toolbox spreadsheet. Below your entries it will show line-by-line how the 8606s should look for consecutive years.

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