FreeTaxUSA Backdoor Roth - Getting double taxed

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Cycle
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FreeTaxUSA Backdoor Roth - Getting double taxed

Post by Cycle » Mon Mar 12, 2018 11:12 pm

In FreeTaxUSA, I'm getting double taxed on my backdoor conversion. I did a backdoor conversion with post-tax money in 2017

I enter the info from my 1099-R exactly as shown and the 8606 gets attached as it should, but instead of populating line 1, it populates lines 16 and 17. I know from reading other postings that I need to get line 1 to have my nondeductible contribtions.

Anyone know how to get the nondeductible contributions to show up on line 1 of 8606 in FreeTaxUSA for a backdoor roth?

r60rider
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by r60rider » Tue Mar 13, 2018 6:18 am

I suggest contacting support at Free Tax. I have found them to be very helpful.

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climber2020
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by climber2020 » Tue Mar 13, 2018 6:59 am

I had this problem the first time I used FreeTaxUSA.

Just keep going, and eventually the numbers turn out right.

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ClevrChico
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by ClevrChico » Tue Mar 13, 2018 7:04 am

climber2020 wrote:
Tue Mar 13, 2018 6:59 am
I had this problem the first time I used FreeTaxUSA.

Just keep going, and eventually the numbers turn out right.
Same for me, it turned out fine. I was only taxed $1 on the dividends gained between the conversion.

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Cycle
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by Cycle » Tue Mar 13, 2018 8:15 am

ClevrChico wrote:
Tue Mar 13, 2018 7:04 am
climber2020 wrote:
Tue Mar 13, 2018 6:59 am
I had this problem the first time I used FreeTaxUSA.

Just keep going, and eventually the numbers turn out right.
Same for me, it turned out fine. I was only taxed $1 on the dividends gained between the conversion.
Ok, I'll just keep forging ahead or contact their support. This is my first year with freetaxusa, previously had used TaxACT or TurboTax

retiredjg
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by retiredjg » Tue Mar 13, 2018 8:20 am

The back door is two steps. Your 1099 only reflects the second step (the Roth conversion). At some point, you have to tell it you made a non-deductible contribution to tIRA (the first step). That is what populates line 1.

Maybe you have not come to the point in the interview process that asks that question.

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ClevrChico
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by ClevrChico » Tue Mar 13, 2018 8:25 am

Cycle wrote:
Tue Mar 13, 2018 8:15 am
ClevrChico wrote:
Tue Mar 13, 2018 7:04 am
climber2020 wrote:
Tue Mar 13, 2018 6:59 am
I had this problem the first time I used FreeTaxUSA.

Just keep going, and eventually the numbers turn out right.
Same for me, it turned out fine. I was only taxed $1 on the dividends gained between the conversion.
Ok, I'll just keep forging ahead or contact their support. This is my first year with freetaxusa, previously had used TaxACT or TurboTax
When you've completed your return, 1040 line 15a should be the full amount you converted and 15b will zero or some nominal amount. If 15b anything more than a few dollars, something is probably wrong. Feel free to PM me or post here for more help.

I'm pretty sure it will work out as the interview questions proceed.

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BarleywineAndBob
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by BarleywineAndBob » Tue Mar 13, 2018 7:26 pm

retiredjg wrote:
Tue Mar 13, 2018 8:20 am
The back door is two steps. Your 1099 only reflects the second step (the Roth conversion). At some point, you have to tell it you made a non-deductible contribution to tIRA (the first step). That is what populates line 1.

Maybe you have not come to the point in the interview process that asks that question.
Right. "IRA Contributions" is the first item under the "Deductions / Credits" section. I missed it the first time through.
Businessmen, they drink my [barley]wine.

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Cycle
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by Cycle » Tue Mar 13, 2018 8:37 pm

BarleywineAndBob wrote:
Tue Mar 13, 2018 7:26 pm
retiredjg wrote:
Tue Mar 13, 2018 8:20 am
The back door is two steps. Your 1099 only reflects the second step (the Roth conversion). At some point, you have to tell it you made a non-deductible contribution to tIRA (the first step). That is what populates line 1.

Maybe you have not come to the point in the interview process that asks that question.
Right. "IRA Contributions" is the first item under the "Deductions / Credits" section. I missed it the first time through.
I got it working per advice here. Just needed to tell it I made the IRA contribution, which is in a section outside "income." Form 8606 now shows the correct number on line 1. :sharebeer

kejoke
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by kejoke » Tue Mar 27, 2018 11:26 pm

I'm running into the double tax issue as well. Under Deductions/Credits when you say you contributed, do you say you contributed to a Traditional IRA or a Roth IRA?

I had been saying I contributed to a traditional IRA although it was converted to a Roth IRA. Is this my issue?

retiredjg
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Re: FreeTaxUSA Backdoor Roth - Getting double taxed

Post by retiredjg » Wed Mar 28, 2018 6:25 am

kejoke wrote:
Tue Mar 27, 2018 11:26 pm
I'm running into the double tax issue as well. Under Deductions/Credits when you say you contributed, do you say you contributed to a Traditional IRA or a Roth IRA?

I had been saying I contributed to a traditional IRA although it was converted to a Roth IRA. Is this my issue?
It is correct to say you contributed to a traditional IRA (and the software should figure out it was non-deductible). Then you have to tell it you converted the tIRA to Roth IRA. Maybe you have not done that step yet.

Here is a link that many people find helpful. In it are links to how to use various types of software. Good luck!

https://thefinancebuff.com/the-backdoor ... ow-to.html

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