Asterisks on Form 8606 for Backdoor Roth?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
schrute
Posts: 246
Joined: Wed Nov 05, 2014 2:27 pm

Asterisks on Form 8606 for Backdoor Roth?

Post by schrute » Thu Oct 11, 2018 10:17 pm

I noticed on my 8606 that there's asterisks on lines 13 and 16 & 17. Basically it says something referencing Pub 590B Worksheet. Lines 6-12 are blank. In years past they've been filled out. Not sure why recently they've been filled. I understand from other posts on here that it's typical from tax software to take one method or another (this particular worksheet). While I believe all the right lines are filled, I'd prefer to have the asterisks gone.

Does anyone know how to remove them in TurboTax or manually enter in lines 6-12?

Alan S.
Posts: 7862
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Asterisks on Form 8606 for Backdoor Roth?

Post by Alan S. » Thu Oct 11, 2018 11:51 pm

I assume you are referring to a footnote for these asterisks that refers back to the Pub 590 B worksheet. The worksheet duplicates much of Form 8606, and the tax programs that do not complete portions of Form 8606 have secured the OK from the IRS to file the worksheet instead, or they would not continue this practice.

Deleting the asterisks may well trigger an IRS inquiry, so I would NOT change anything you file. You should check the worksheet and Form 1040, lines 15a and 15b to be sure the taxable amounts are correct. If you see no errors, you should be good to go.

If you prefer seeing this data on Form 8606 instead of a worksheet, you could fill one in and keep it in your own records, but do not file it. For example, if there is any basis remaining for future use, you could show it on YOUR 8606, line 14. The 8606 could come in handy if you change tax programs for 2018 and the next one actually files the 8606 complete.

User avatar
FiveK
Posts: 5833
Joined: Sun Mar 16, 2014 2:43 pm

Re: Asterisks on Form 8606 for Backdoor Roth?

Post by FiveK » Fri Oct 12, 2018 3:59 pm

schrute wrote:
Thu Oct 11, 2018 10:17 pm
I noticed on my 8606 that there's asterisks on lines 13 and 16 & 17. Basically it says something referencing Pub 590B Worksheet. Lines 6-12 are blank. In years past they've been filled out. Not sure why recently they've been filled. I understand from other posts on here that it's typical from tax software to take one method or another (this particular worksheet). While I believe all the right lines are filled, I'd prefer to have the asterisks gone.

Does anyone know how to remove them in TurboTax or manually enter in lines 6-12?
As Alan S. said, TurboTax is likely doing it correctly.

See the Form8606 tab in the personal finance toolbox spreadsheet and toggle the setting in the "Force 8606" row to see the difference between using Pub 5909-B or not. The differences will likely be cosmetic only, with the important results (taxable portion; basis) identical.

FactualFran
Posts: 747
Joined: Sat Feb 21, 2015 2:29 pm

Re: Asterisks on Form 8606 for Backdoor Roth?

Post by FactualFran » Fri Oct 12, 2018 4:38 pm

As other posts have indicated, what Turbo Tax is doing is correct. According to IRS Publication 590-B, you need to use a worksheet in the publication if you made contributions to a traditional IRA for a that may not be fully deductible. What lines of Form 8606 are to be filled-in depend on a value calculated by the worksheet.

As far as I can tell, there may be a difference in the taxable amount of a Roth conversion using only Form 8606 versus using the worksheet in Publication 590-B and Form 8606 only when a contribution made to a traditional IRS for the year when the Roth conversion was done is partly deductible.

schrute
Posts: 246
Joined: Wed Nov 05, 2014 2:27 pm

Re: Asterisks on Form 8606 for Backdoor Roth?

Post by schrute » Fri Oct 12, 2018 5:01 pm

FactualFran wrote:
Fri Oct 12, 2018 4:38 pm
As other posts have indicated, what Turbo Tax is doing is correct. According to IRS Publication 590-B, you need to use a worksheet in the publication if you made contributions to a traditional IRA for a that may not be fully deductible. What lines of Form 8606 are to be filled-in depend on a value calculated by the worksheet.

As far as I can tell, there may be a difference in the taxable amount of a Roth conversion using only Form 8606 versus using the worksheet in Publication 590-B and Form 8606 only when a contribution made to a traditional IRS for the year when the Roth conversion was done is partly deductible.
It's not deductible at all.

FactualFran
Posts: 747
Joined: Sat Feb 21, 2015 2:29 pm

Re: Asterisks on Form 8606 for Backdoor Roth?

Post by FactualFran » Fri Oct 12, 2018 5:42 pm

schrute wrote:
Fri Oct 12, 2018 5:01 pm
It's not deductible at all.
The wording in the Contribution and distribution in the same year paragraph of IRS Publication 590-B (for 2017) is: "If you received a distribution in 2017 from a traditional IRA and you also made contributions to a traditional IRA for 2017 that may not be fully deductible because of the income limits".

A contribution that is not deductible at all is not fully deductible.

Post Reply