8606 Help. Last backdoor 2011

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eradicator
Posts: 50
Joined: Fri Feb 23, 2007 4:56 pm

8606 Help. Last backdoor 2011

Post by eradicator » Sun Feb 10, 2019 2:33 pm

Hello All, I decided that I have been missing out on ROTH contributions and since I am no longer longer trying to save for a home I should start contributing again.

Income only allows a backdoor ROTH and I had done the same for several years 2006-2011 (total contribution 28,000). In each year I immediately converted my ND-tIRA to a ROTH so there were minimal taxes.

In 2018 I decided to start the process again. Being 50 I made a ND-tIRA contribution of 6500 and immediately converted it to a ROTH (was 6501 at time of conversion). Contribution and conversion all 2018 events.

When completing 8606 for 2018 what do I use in line 2? I think 0 as all of my prior ND-tIRA contributions were converted and I have no other tIRA accounts. I think it would look like the below, $0 on line 2..etc

Any feedback is appreciated.

Form 8606
1 Nondeduct. Contrib. 6500
2 tIRA basis 0
3 Add lines 1 and 2 6500
4 Contributed next year
5 Line 3 minus Line 4 6500
6 EOY tIRA balance
7 non-conversion tIRA distrib.
8 t->R conversion
9 Add lines 6, 7, and 8
10 Divide line 5 by line 9
11 Line 8 * line 10
12 Line 7 * line 10
13 Add lines 11 and 12 6500
14 Subtract line 13 from line 3 0
15 Taxable amount 0
16 t->R conversion 6501
17 Basis in t->R conversion 6500
18 Taxable amount 1

retiredjg
Posts: 38184
Joined: Thu Jan 10, 2008 12:56 pm

Re: 8606 Help. Last backdoor 2011

Post by retiredjg » Sun Feb 10, 2019 3:30 pm

You are correct. Line 2 should be $0 since you have no basis in tIRA to carry over from previous years. Specifically, line 14 from the last Form 8606 was $0.

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eradicator
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Joined: Fri Feb 23, 2007 4:56 pm

Re: 8606 Help. Last backdoor 2011

Post by eradicator » Sun Feb 10, 2019 4:52 pm

Thanks. I suppose it is a good idea to keep a spreadsheet with your contributions over the years?

Would I ever need the historical 8606 forms?

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FiveK
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Re: 8606 Help. Last backdoor 2011

Post by FiveK » Sun Feb 10, 2019 11:29 pm

eradicator wrote:
Sun Feb 10, 2019 4:52 pm
Thanks. I suppose it is a good idea to keep a spreadsheet with your contributions over the years?
Can't hurt. See the Form8606 tab in the personal finance toolbox spreadsheet for a worked example.
Would I ever need the historical 8606 forms?
Never say never...but if you have the numbers in a spreadsheet the forms are likely superfluous.

retiredjg
Posts: 38184
Joined: Thu Jan 10, 2008 12:56 pm

Re: 8606 Help. Last backdoor 2011

Post by retiredjg » Mon Feb 11, 2019 9:42 am

eradicator wrote:
Sun Feb 10, 2019 4:52 pm
Thanks. I suppose it is a good idea to keep a spreadsheet with your contributions over the years?
It is a good idea to keep a record of how every penny gets into Roth IRA. From the beginning.

If you ever have to take money out before age 59.5, you will need that information. Keep the documentation as well - Forms 5498 each year and Form 8606 too. It does not matter much if you keep it on paper or on a spreadsheet or scan it or whatever.

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