non-deductible IRA contribution tracking

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Topic Author
Cruncher
Posts: 170
Joined: Mon Feb 01, 2010 12:56 am

non-deductible IRA contribution tracking

Post by Cruncher » Tue Feb 11, 2020 3:03 pm

Hello all,

Does anyone track non-deductible contributions to their IRAs, that they specifically use to rollover to Roth IRAs?

We've had zero balance in our traditional IRAs for decades. We use our" Traditional" IRA as a vehicle to backdoor Roth.

Thanks,
Cruncher

PS We converted (rollover?) our small tax-deferred IRAs in 1998, paid the additional tax over 4 years and have been in Tax free IRAs every since (direct Roth IRAs when able, then "back door" after our income exceeded IRS income limits).

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anon_investor
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Re: non-deductible IRA contribution tracking

Post by anon_investor » Tue Feb 11, 2020 3:07 pm

Cruncher wrote:
Tue Feb 11, 2020 3:03 pm
Hello all,

Does anyone track non-deductible contributions to their IRAs, that they specifically use to rollover to Roth IRAs?

We've had zero balance in our traditional IRAs for decades. We use our" Traditional" IRA as a vehicle to backdoor Roth.

Thanks,
Cruncher

PS We converted (rollover?) our small tax-deferred IRAs in 1998, paid the additional tax over 4 years and have been in Tax free IRAs every since (direct Roth IRAs when able, then "back door" after our income exceeded IRS income limits).
No special tracking other than completing IRS Form 8606, and I keep a copy of that for my personal records.

MotoTrojan
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Re: non-deductible IRA contribution tracking

Post by MotoTrojan » Tue Feb 11, 2020 3:08 pm

Once it’s converted to Roth, the basis no longer matters.

Topic Author
Cruncher
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Joined: Mon Feb 01, 2010 12:56 am

Re: non-deductible IRA contribution tracking

Post by Cruncher » Tue Feb 11, 2020 3:11 pm

Thanks Mojo!

I've read through the IRS website and can't determine a reason to track contributions to a Roth IRA.

Topic Author
Cruncher
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Re: non-deductible IRA contribution tracking

Post by Cruncher » Tue Feb 11, 2020 3:12 pm

I do keep 8606's ...

mega317
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Re: non-deductible IRA contribution tracking

Post by mega317 » Tue Feb 11, 2020 3:15 pm

Yeah I do, I think I read here somewhere that you should track. Maybe with regards to the 5 year rules?

Anyway I just have a spreadsheet. Each row has 3 columns. Year, amount contributed, then comment "nondeductible tIRA, roth conversion". It's clearly silly but it takes 30 seconds a year.

02nz
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Re: non-deductible IRA contribution tracking

Post by 02nz » Tue Feb 11, 2020 3:17 pm

Cruncher wrote:
Tue Feb 11, 2020 3:11 pm
I've read through the IRS website and can't determine a reason to track contributions to a Roth IRA.
Contributions but not growth can be withdrawn at any time without penalty, so that would be one reason to keep track of Roth IRA contributions.

Topic Author
Cruncher
Posts: 170
Joined: Mon Feb 01, 2010 12:56 am

Re: non-deductible IRA contribution tracking

Post by Cruncher » Tue Feb 11, 2020 3:20 pm

I don't plan on withdrawing any of the Roth money ... hopefully for at least a couple decades.

Heck, I plan on willing this to my kids in hopefully 50 years. :D

retiredjg
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Re: non-deductible IRA contribution tracking

Post by retiredjg » Tue Feb 11, 2020 3:31 pm

Cruncher wrote:
Tue Feb 11, 2020 3:20 pm
I don't plan on withdrawing any of the Roth money ... hopefully for at least a couple decades.

Heck, I plan on willing this to my kids in hopefully 50 years. :D
What if things don't go the way you plan?

How much does it hurt to keep a spreadsheet or ledger of how and when money got into your Roth IRA.

Topic Author
Cruncher
Posts: 170
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Re: non-deductible IRA contribution tracking

Post by Cruncher » Tue Feb 11, 2020 3:39 pm

I do have a spreadsheet, I just never filled out the "IRA Tracking" worksheet in TT, well not for at least a many years.

Also, have a stack of 8606's.

Good advice though.

kaneohe
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Re: non-deductible IRA contribution tracking

Post by kaneohe » Wed Feb 12, 2020 9:05 am

MotoTrojan wrote:
Tue Feb 11, 2020 3:08 pm
Once it’s converted to Roth, the basis no longer matters.
It may not matter any more for the TIRA basis but now the Roth basis becomes important.
If you withdraw Roth funds before they are qualified, are you withdrawing original contributions,
conversions, or earnings? If you are withdrawing conversions, were they taxable or non-taxable
conversions? These things matter since they determine whether your Roth withdrawals are taxed/penalized.

retiredjg
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Re: non-deductible IRA contribution tracking

Post by retiredjg » Wed Feb 12, 2020 9:11 am

Cruncher wrote:
Tue Feb 11, 2020 3:39 pm
I do have a spreadsheet, I just never filled out the "IRA Tracking" worksheet in TT, well not for at least a many years.

Also, have a stack of 8606's.
I think the spreadsheet should be adequate. If I needed to withdraw from Roth before age 59.5, I would not trust the worksheet in TT anyway. I might throw out the 8606's after 5 years myself.

Alan S.
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Location: Prescott, AZ

Re: non-deductible IRA contribution tracking

Post by Alan S. » Wed Feb 12, 2020 11:45 am

Cruncher wrote:
Tue Feb 11, 2020 3:39 pm
I do have a spreadsheet, I just never filled out the "IRA Tracking" worksheet in TT, well not for at least a many years.

Also, have a stack of 8606's.

Good advice though.
If that stack of 8606 forms includes your 1998 8606, is there an amount on line 12? And if there is, did you carry it over to line 2 when you first started doing back door Roths?

Katietsu
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Re: non-deductible IRA contribution tracking

Post by Katietsu » Thu Feb 13, 2020 11:33 am

Cruncher wrote:
Tue Feb 11, 2020 3:39 pm
I do have a spreadsheet, I just never filled out the "IRA Tracking" worksheet in TT, well not for at least a many years.

Also, have a stack of 8606's.

Good advice though.
I have a folder with a copy of each 8606 and of each 5498. These are independent of the copy within the folder for each tax year.

My experience has been that the TurboTax tracking worksheet keeps itself up to date.

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