Filed extension, finishing up taxes, question about non-deductible IRA

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schrute
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Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sat Oct 12, 2019 4:23 pm

I filed an extension so now getting ready to file my return. I did an IRA deposit for backdoor Roth. Did the same thing last year, but didn't switch it from traditional to Roth until the year later. I think that's what shows here. Does this look right?

Image

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sat Oct 12, 2019 5:23 pm

What were the dates of each contribution and each conversion?

I think you are putting both years on 1 year's form.

HomeStretch
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by HomeStretch » Sat Oct 12, 2019 5:51 pm

Are the following correct:

1. You made a non-deductible tIRA contribution of $5,500 for tax year 2017

2. You made a non-deductible tIRA contribution of $5,500 for tax year 2018

3. You did a Roth conversion of $11,004 during tax year 2018 ($4 was earnings you owe tax on)

4. Your 12/31/18 tIRA balance was $0

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sat Oct 12, 2019 6:18 pm

HomeStretch wrote:
Sat Oct 12, 2019 5:51 pm
Are the following correct:

1. You made a non-deductible tIRA contribution of $5,500 for tax year 2017

2. You made a non-deductible tIRA contribution of $5,500 for tax year 2018

3. You did a Roth conversion of $11,004 during tax year 2018 ($4 was earnings you owe tax on)

4. Your 12/31/18 tIRA balance was $0
Yes, correct. I had a $4 gain.

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sat Oct 12, 2019 6:21 pm

retiredjg wrote:
Sat Oct 12, 2019 5:23 pm
What were the dates of each contribution and each conversion?

I think you are putting both years on 1 year's form.
I did a 2017 and 2018 contribution in 2018 (my 2017 was right before April 17). I rolled over to Roth some time late, but the 2018 contribution in December before 12/31.

HomeStretch
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by HomeStretch » Sat Oct 12, 2019 6:40 pm

Is the amount on 2018 Form 8606 Line 2 ($5,500) the same as the amount you reported on 2017 Form 8606 Line 14?

If so, your 2018 Form looks correct to me. Hopefully you’ll get a thumbs up from another couple posters too.

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sat Oct 12, 2019 6:45 pm

It's different. Line 2 in 2018 is 5500 and in 2017 Line 14 is 0.

HomeStretch
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by HomeStretch » Sat Oct 12, 2019 7:15 pm

According to the IRS Instructions to 2018 Form 8606 pages 5-6, the amount should be the same. https://www.irs.gov/pub/irs-pdf/i8606.pdf

You would be carrying forward your IRA basis (which is your 2017 non-deductible IRA contribution that you didn’t convert to Roth until 2018) reported on your 2017 Form 8606 Line 14 to your 2018 Form 8606 Line 2. Did you enter the Line 2 amount ($5,500) or did your tax prep software automatically fill it in from last year’s return?

Based on your post, your traditional IRA (tIRA) balance at 12/31/17 should have been $5,500 (the 2017 contribution) plus or minus any earnings on the contribution. Your tIRA balance at 12/31/18 should be $0 as you converted both 2017 & 2018 contributions and earnings in 2018.

That’s how I see it but maybe I am off base somewhere. I think your 2017 Form 8606 may be the issue. See if anyone else weighs in on this.

Perhaps try comparing your 2017 and 2018 Form 8606s side-by-side to see if you were consistent in the methodology you used to prepare them.

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by Duckie » Sat Oct 12, 2019 8:58 pm

HomeStretch wrote:You would be carrying forward your IRA basis (which is your 2017 non-deductible IRA contribution that you didn’t convert to Roth until 2018) reported on your 2017 Form 8606 Line 14 to your 2018 Form 8606 Line 2. Did you enter the Line 2 amount ($5,500) or did your tax prep software automatically fill it in from last year’s return?
<snip>
That’s how I see it but maybe I am off base somewhere. I think your 2017 Form 8606 may be the issue. See if anyone else weighs in on this.
You're not off-base. The OP's 2017 Form 8606 should have had $5500 on line 14. If it's not there he will need to correct that form.

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sat Oct 12, 2019 10:25 pm

Do I need to enter my base every year? For line 14, it says for traditional IRAs, which are all 0.

Katietsu
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by Katietsu » Sat Oct 12, 2019 10:41 pm

schrute wrote:
Sat Oct 12, 2019 10:25 pm
Do I need to enter my base every year? For line 14, it says for traditional IRAs, which are all 0.
Line 14 should be zero on the 2018 form because at the end of 2018 there was no basis left in the traditional IRA. You “used up” your basis with your total Roth conversion.

However, line 14 should be $5500 on your 2017 Form 8606. This line then gets carried forward to line 2 Form 8606 the following year. The 2018 form correctly shows $5500 on line2. If the software pulled this forward automatically then the 2017 form should be correct.

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 12:23 am

Katietsu wrote:
Sat Oct 12, 2019 10:41 pm
schrute wrote:
Sat Oct 12, 2019 10:25 pm
Do I need to enter my base every year? For line 14, it says for traditional IRAs, which are all 0.
Line 14 should be zero on the 2018 form because at the end of 2018 there was no basis left in the traditional IRA. You “used up” your basis with your total Roth conversion.

However, line 14 should be $5500 on your 2017 Form 8606. This line then gets carried forward to line 2 Form 8606 the following year. The 2018 form correctly shows $5500 on line2. If the software pulled this forward automatically then the 2017 form should be correct.
If I go into TurboTax and make adjustment (through the wizard) and show the contribution was made between Jan 1 - April 15.

show I made, I noticed that it has line 18 as $5,500 aka taxable. How can I make 14 just fill in? Basically did Step 4 here for 2017: https://www.whitecoatinvestor.com/backd ... -tutorial/

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by rkhusky » Sun Oct 13, 2019 6:17 am

schrute wrote:
Sun Oct 13, 2019 12:23 am
show I made, I noticed that it has line 18 as $5,500 aka taxable. How can I make 14 just fill in? Basically did Step 4 here for 2017: https://www.whitecoatinvestor.com/backd ... -tutorial/
Did you follow the "Late Contributions to the Backdoor Roth IRA" section on the above site?
The example shows only Part I filled in for 2017. $5500 for lines 1,3,14.
I note that you did not fill in line 8 above, whereas the example for 2018 shows $11K in lines 8,9,11.

HomeStretch
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by HomeStretch » Sun Oct 13, 2019 7:07 am

schrute wrote:
Sun Oct 13, 2019 12:23 am
Katietsu wrote:
Sat Oct 12, 2019 10:41 pm
schrute wrote:
Sat Oct 12, 2019 10:25 pm
Do I need to enter my base every year? For line 14, it says for traditional IRAs, which are all 0.
Line 14 should be zero on the 2018 form because at the end of 2018 there was no basis left in the traditional IRA. You “used up” your basis with your total Roth conversion.

However, line 14 should be $5500 on your 2017 Form 8606. This line then gets carried forward to line 2 Form 8606 the following year. The 2018 form correctly shows $5500 on line2. If the software pulled this forward automatically then the 2017 form should be correct.
If I go into TurboTax and make adjustment (through the wizard) and show the contribution was made between Jan 1 - April 15.

show I made, I noticed that it has line 18 as $5,500 aka taxable. How can I make 14 just fill in? Basically did Step 4 here for 2017: https://www.whitecoatinvestor.com/backd ... -tutorial/
You are now talking about your 2017 Form 8606 that you are trying to correct so that Line 14 will show $5,500, right?

If 2017 Form 8606 Line 18 incorrectly shows $5,500, it’s because either:
(1) there is $5,500 shown incorrectly in Part II as a Roth conversion done in 2017. Lines 16 - 18 should all be zero.
(2) there is $11,000 shown incorrectly in Part I as basis. Line 14 should be $5,500.

You said you made a non-deductible tIRA contribution for tax year 2017 (which means 2017 Form 8606 Part I should be completed and Line 14 should show $5,500). You also said you made no Roth conversions during calendar year 2017 (you converted the 2017 contribution in 2018), which means 2017 Form 8606 Part II should be blank.

Edited to correct Line 12 to Line 14.
Last edited by HomeStretch on Sun Oct 13, 2019 7:51 am, edited 1 time in total.

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 7:38 am

schrute wrote:
Sun Oct 13, 2019 12:23 am
If I go into TurboTax and make adjustment (through the wizard) and show the contribution was made between Jan 1 - April 15.

show I made, I noticed that it has line 18 as $5,500 aka taxable. How can I make 14 just fill in? Basically did Step 4 here for 2017: https://www.whitecoatinvestor.com/backd ... -tutorial/
You do not need to tell it the contribution was made between Jan 1 and April 15, 2017 because that is line 4 and you should not ever get to line 4.

Read the form. There is a question between line 3 and line 4 and the answer is "no". So you do not go on to line 4.

Your 2017 Form should have $5,500 on lines 1, 3, and 14. All other lines should be blank.


Your 2018 form seems to be correct to me, but I don't know how Turbotax could generate that form since you say that your 2017 form was incorrect.

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 7:44 am

HomeStretch wrote:
Sun Oct 13, 2019 7:07 am
You said you made a non-deductible tIRA contribution for tax year 2017 (which means 2017 Form 8606 Part I should be completed and Line 12 should show $5,500). You also said you made no Roth conversions during calendar year 2017 (you converted the 2017 contribution in 2018), which means 2017 Form 8606 Part II should be blank.
On the 2017 form there should be no entry on line 12 because you never get to line 12.

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 7:47 am

schrute wrote:
Sat Oct 12, 2019 10:25 pm
Do I need to enter my base every year? For line 14, it says for traditional IRAs, which are all 0.
You never "enter" line 14. It is calculated by the form (by subtracting line 13 from line 3).

HomeStretch
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by HomeStretch » Sun Oct 13, 2019 7:52 am

retiredjg wrote:
Sun Oct 13, 2019 7:44 am
HomeStretch wrote:
Sun Oct 13, 2019 7:07 am
You said you made a non-deductible tIRA contribution for tax year 2017 (which means 2017 Form 8606 Part I should be completed and Line 12 should show $5,500). You also said you made no Roth conversions during calendar year 2017 (you converted the 2017 contribution in 2018), which means 2017 Form 8606 Part II should be blank.
On the 2017 form there should be no entry on line 12 because you never get to line 12.
Thanks! I meant Line 14 and corrected original post.

kaneohe
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by kaneohe » Sun Oct 13, 2019 8:23 am

Line 16 of 8606 " If you completed Part I, enter the amount from line 8. " Since you completed Pt I,shouldn't the amount on Line16
be on Line 8(now blank) and shouldn't all related lines be filled in too? (L9-11) ...........or perhaps this is the alternate ( non-obvious from form) way of doing it?

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 8:34 am

kaneohe wrote:
Sun Oct 13, 2019 8:23 am
Line 16 of 8606 " If you completed Part I, enter the amount from line 8. " Since you completed Pt I,shouldn't the amount on Line16
be on Line 8(now blank) and shouldn't all related lines be filled in too? (L9-11) ...........or perhaps this is the alternate, non-obvious from form, way of doing it?
If you were doing the form by hand and following the instructions written on the form, there would be an entry on line 8 - the $11,004 that was converted in 2018.

However, tax software handles this differently, going through a worksheet that few people know about. Tax software often leaves lines 6 - 12 completely blank while still populating Part II correctly.

It's a mystery.

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 11:40 am

retiredjg wrote:
Sun Oct 13, 2019 7:38 am
schrute wrote:
Sun Oct 13, 2019 12:23 am
If I go into TurboTax and make adjustment (through the wizard) and show the contribution was made between Jan 1 - April 15.

show I made, I noticed that it has line 18 as $5,500 aka taxable. How can I make 14 just fill in? Basically did Step 4 here for 2017: https://www.whitecoatinvestor.com/backd ... -tutorial/
You do not need to tell it the contribution was made between Jan 1 and April 15, 2017 because that is line 4 and you should not ever get to line 4.

Read the form. There is a question between line 3 and line 4 and the answer is "no". So you do not go on to line 4.

Your 2017 Form should have $5,500 on lines 1, 3, and 14. All other lines should be blank.


Your 2018 form seems to be correct to me, but I don't know how Turbotax could generate that form since you say that your 2017 form was incorrect.
I don't know either, I thought I pulled everything in. Although, it seems strange when I try to correct 2017, it puts the $5,500 as taxable.

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 11:57 am

schrute wrote:
Sun Oct 13, 2019 11:40 am
I don't know either, I thought I pulled everything in. Although, it seems strange when I try to correct 2017, it puts the $5,500 as taxable.
What do all the lines on the 2017 form say?

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 12:47 pm

retiredjg wrote:
Sun Oct 13, 2019 11:57 am
schrute wrote:
Sun Oct 13, 2019 11:40 am
I don't know either, I thought I pulled everything in. Although, it seems strange when I try to correct 2017, it puts the $5,500 as taxable.
What do all the lines on the 2017 form say?
Here's 2017

Image

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 12:50 pm

Was this form generated by turbo tax or did you force any numbers on any of the lines?

Was 2017 your very first non-deductble contribution?

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 12:52 pm

Another possibility....

in 2017, did you take any distribution from traditional IRA, SEP IRA, or SIMPLE IRA or do a Roth conversion?

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 12:53 pm

retiredjg wrote:
Sun Oct 13, 2019 12:50 pm
Was this form generated by turbo tax or did you force any numbers on any of the lines?

Was 2017 your very first non-deductble contribution?
No forced numbers, it was generated from Turbo Tax. 2016 was my first non-deductible, but I converted it right away. In 2015 it was deductible for me.

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FiveK
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by FiveK » Sun Oct 13, 2019 12:57 pm

schrute wrote:
Sat Oct 12, 2019 6:21 pm
I did a 2017 and 2018 contribution in 2018 (my 2017 was right before April 17). I rolled over to Roth some time late, but the 2018 contribution in December before 12/31.
That sequence doesn't match the 2017 form posted in
schrute wrote:
Sun Oct 13, 2019 12:47 pm
Here's 2017
Do you understand why it doesn't match?

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 12:57 pm

schrute wrote:
Sun Oct 13, 2019 12:53 pm
No forced numbers, it was generated from Turbo Tax. 2016 was my first non-deductible, but I converted it right away. In 2015 it was deductible for me.
What happened to the money in the IRA that had come from deductible contributions?

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 12:59 pm

retiredjg wrote:
Sun Oct 13, 2019 12:57 pm
in the IRA that had come from deductible contributions
retiredjg wrote:
Sun Oct 13, 2019 12:52 pm
Another possibility....

in 2017, did you take any distribution from traditional IRA, SEP IRA, or SIMPLE IRA or do a Roth conversion?
No distributions and no Roth conversions in 2017. I did one in 2016 and then 2018.

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 1:01 pm

schrute wrote:
Sun Oct 13, 2019 12:53 pm
retiredjg wrote:
Sun Oct 13, 2019 12:50 pm
Was this form generated by turbo tax or did you force any numbers on any of the lines?

Was 2017 your very first non-deductble contribution?
No forced numbers, it was generated from Turbo Tax. 2016 was my first non-deductible, but I converted it right away.
You say you converted it right away. Is it possible that the conversion happened in 2017 instead of 2016?

Like maybe you made the 2016 contribution in 2017 (while doing your taxes) and then converted it to Roth in 2017?

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 1:03 pm

retiredjg wrote:
Sun Oct 13, 2019 12:57 pm
schrute wrote:
Sun Oct 13, 2019 12:53 pm
No forced numbers, it was generated from Turbo Tax. 2016 was my first non-deductible, but I converted it right away. In 2015 it was deductible for me.
What happened to the money in the IRA that had come from deductible contributions?
Your answer to this question didn't show up. So I'm asking again - where are the deductible contributions?

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 1:03 pm

retiredjg wrote:
Sun Oct 13, 2019 12:57 pm
schrute wrote:
Sun Oct 13, 2019 12:53 pm
No forced numbers, it was generated from Turbo Tax. 2016 was my first non-deductible, but I converted it right away. In 2015 it was deductible for me.
What happened to the money in the IRA that had come from deductible contributions?
Nevermind, I just looked, it was a non-deductible contribution. I converted/rolled it to Roth right away that year.

retiredjg
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 1:08 pm

Your 2017 form says that you converted $5,500 from IRA to Roth IRA in 2017 (line 16). Looking at your 2017 return, why does it think that?

That is why your line 14 is $0 - because it thinks you did a conversion in 2017.

rkhusky
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by rkhusky » Sun Oct 13, 2019 1:10 pm

If you had no distribution or Roth conversion in 2017, you should not have anything on Line 5. You should have entered the amount from Line 3 into Line 14 and quit, as the box under Line 3 says.

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 1:16 pm

rkhusky wrote:
Sun Oct 13, 2019 1:10 pm
If you had no distribution or Roth conversion in 2017, you should not have anything on Line 5. You should have entered the amount from Line 3 into Line 14 and quit, as the box under Line 3 says.
Agree, I carried over what I did for 2016. Since I contributed/converted in 2018, I thought that "counted" for 2017 since that's where the funds sort of 'originated'. I guess that doesn't make sense since it counts for 2018 (obviously when I get that statement showing $11K).

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 1:17 pm

rkhusky wrote:
Sun Oct 13, 2019 1:10 pm
If you had no distribution or Roth conversion in 2017, you should not have anything on Line 5. You should have entered the amount from Line 3 into Line 14 and quit, as the box under Line 3 says.
Correct except....this poster said the form was generated by Turbo Tax. So schrute didn't "enter" anything on line 14. Turbo tax entered it.

The reason TT put $0 on line 14 is that TT was told there was a Roth conversion in 2017. If a Roth conversion did happen in 2017, TT entered $0 correctly on line 14.

I think that is where the problem lies.

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 1:28 pm

My 2018 should be right, correct? No need to fill in other boxes?

It's getting Turbo to enter line 14 in for 2017. I'm not sure why or how it can do that. There's some fields I can enter to enter line 14, but it still shows for lines 1, 3, 4, 16 and 18.

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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 1:33 pm

You cannot get TT to enter $5,500 on line 14 because you told TT you did a conversion of $5,500 in 2017.

What you remember doing and what you told TT you did are not the same.


Your 2018 Form is correct according to what you remember (what you told us). But it is incorrect according to what you told TT when you filed your 2017 taxes.

You need to figure out whether your memory is right or whether you did your 2017 taxes right before you will know.

rkhusky
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by rkhusky » Sun Oct 13, 2019 1:37 pm

schrute wrote:
Sun Oct 13, 2019 1:28 pm
My 2018 should be right, correct? No need to fill in other boxes?

It's getting Turbo to enter line 14 in for 2017. I'm not sure why or how it can do that. There's some fields I can enter to enter line 14, but it still shows for lines 1, 3, 4, 16 and 18.
Does TT let you say “No” for the checkbox after Line 3?

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 1:37 pm

retiredjg wrote:
Sun Oct 13, 2019 1:17 pm
rkhusky wrote:
Sun Oct 13, 2019 1:10 pm
If you had no distribution or Roth conversion in 2017, you should not have anything on Line 5. You should have entered the amount from Line 3 into Line 14 and quit, as the box under Line 3 says.
Correct except....this poster said the form was generated by Turbo Tax. So schrute didn't "enter" anything on line 14. Turbo tax entered it.

The reason TT put $0 on line 14 is that TT was told there was a Roth conversion in 2017. If a Roth conversion did happen in 2017, TT entered $0 correctly on line 14.

I think that is where the problem lies.
Ok, I think I figured it out. TT (if you guys use it) does it a bit weird, because it handles the 1099-R under Wages. In there, I put 'Rolled to an Roth' because I eventually did that. If I uncheck that and go into Deductions and change that it was made between Jan 1 - April 17 2018, it correctly fills out forms 1, 3, 14 and leaves 16,17 blank.
Last edited by schrute on Sun Oct 13, 2019 1:43 pm, edited 1 time in total.

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schrute
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 1:40 pm

rkhusky wrote:
Sun Oct 13, 2019 1:37 pm
schrute wrote:
Sun Oct 13, 2019 1:28 pm
My 2018 should be right, correct? No need to fill in other boxes?

It's getting Turbo to enter line 14 in for 2017. I'm not sure why or how it can do that. There's some fields I can enter to enter line 14, but it still shows for lines 1, 3, 4, 16 and 18.
Does TT let you say “No” for the checkbox after Line 3?
It's a wizard and asks 'What did you do with the money?' and my option is 'moved the money to another retirement account or returned it tot he same retirement account) or did something else.

The second option is 1) 'rolled over all of this money' or 2) 'converted all of this money to a Roth IRA account' or 3) 'combination of rolling over, converting or cashing out'.

The latter one I had selected as 2 and instead selected 1.

THEN if I go under Deductions, I can change adding that the contribution was made between Jan 1 - April 17 2018 and it won't show as a taxable gain.

HomeStretch
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by HomeStretch » Sun Oct 13, 2019 1:43 pm

retiredjg wrote:
Sun Oct 13, 2019 1:17 pm
rkhusky wrote:
Sun Oct 13, 2019 1:10 pm
If you had no distribution or Roth conversion in 2017, you should not have anything on Line 5. You should have entered the amount from Line 3 into Line 14 and quit, as the box under Line 3 says.
Correct except....this poster said the form was generated by Turbo Tax. So schrute didn't "enter" anything on line 14. Turbo tax entered it.

The reason TT put $0 on line 14 is that TT was told there was a Roth conversion in 2017. If a Roth conversion did happen in 2017, TT entered $0 correctly on line 14.

I think that is where the problem lies.

+1

OP:

Just to be clear, the 2017 Form 8606 you posted here is the original one you filed with last year’s return and that 2017 return is the one TurboTax used to populate your 2018 return/Form 8606 you posted early in the thread. Is that correct?

Your 2017 Form 8606 doesn’t match the facts you posted here. One of them is wrong:
1. The facts you posted say you had a 12/31/16 non-deductible tIRA balance $0, a 2017 tax year non-deductible tIRA contribution $5,500 and 2017 calendar year back door Roth $0.
2. The 2017 Form 8606 Line 16 generated by TurboTax says you did a 2017 calendar year Roth conversion $5,500 (yet you say you did $0). The source of this would be a 2017 1099-R entered by you. Do you have a 2017 1099-R?

What’s also interesting is that your 2018 Form 8606
generated by Turbo Tax shows $5,500 on Line 2 which doesn’t agree with 2017 Form 8606 Line 14 showing $0. That means either TurboTax didn’t rollover your 2017 information properly to 2018 or somehow an adjustment was made???

I would say go to a tax professional to help sort this out but it’s unlikely you will find one a couple days before your 10/15 deadline.

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

Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 1:49 pm

schrute wrote:
Sun Oct 13, 2019 1:37 pm
Ok, I think I figured it out. TT (if you guys use it) does it a bit weird, because it handles the 1099-R under Wages. In there, I put 'Rolled to an Roth' because I eventually did that. If I uncheck that and go into Deductions and change that it was made between Jan 1 - April 17 2018, it correctly fills out forms 1, 3, 14 and leaves 16,17 blank.
This sounds like progress. And I don't think you are not the first person who has stumbled on that question.

I hope this does not change your form for 2018. You need to check.

You also need to sign the new 2017 and send it in (separately) to the IRS.

Topic Author
schrute
Posts: 304
Joined: Wed Nov 05, 2014 2:27 pm

Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 1:53 pm

HomeStretch wrote:
Sun Oct 13, 2019 1:43 pm
retiredjg wrote:
Sun Oct 13, 2019 1:17 pm
rkhusky wrote:
Sun Oct 13, 2019 1:10 pm
If you had no distribution or Roth conversion in 2017, you should not have anything on Line 5. You should have entered the amount from Line 3 into Line 14 and quit, as the box under Line 3 says.
Correct except....this poster said the form was generated by Turbo Tax. So schrute didn't "enter" anything on line 14. Turbo tax entered it.

The reason TT put $0 on line 14 is that TT was told there was a Roth conversion in 2017. If a Roth conversion did happen in 2017, TT entered $0 correctly on line 14.

I think that is where the problem lies.

+1

OP:

Just to be clear, the 2017 Form 8606 you posted here is the original one you filed with last year’s return and that 2017 return is the one TurboTax used to populate your 2018 return/Form 8606 you posted early in the thread. Is that correct?

Your 2017 Form 8606 doesn’t match the facts you posted here. One of them is wrong:
1. The facts you posted say you had a 12/31/16 non-deductible tIRA balance $0, a 2017 tax year non-deductible tIRA contribution $5,500 and 2017 calendar year back door Roth $0.
2. The 2017 Form 8606 Line 16 generated by TurboTax says you did a 2017 calendar year Roth conversion $5,500 (yet you say you did $0). The source of this would be a 2017 1099-R entered by you. Do you have a 2017 1099-R?

What’s also interesting is that your 2018 Form 8606
generated by Turbo Tax shows $5,500 on Line 2 which doesn’t agree with 2017 Form 8606 Line 14 showing $0. That means either TurboTax didn’t rollover your 2017 information properly to 2018 or somehow an adjustment was made???

I would say go to a tax professional to help sort this out but it’s unlikely you will find one a couple days before your 10/15 deadline.
It could be based on my 2018 1099-R? 2017 1099-R shows IRA/SEP/SIMPLE box checked, Distribution code 2 checked and taxable amount not determined/total distribution boxes checked. 2018 shows the exact same boxes checked except for $11,000.

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FiveK
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by FiveK » Sun Oct 13, 2019 2:02 pm

schrute wrote:
Sun Oct 13, 2019 1:53 pm
2017 1099-R shows IRA/SEP/SIMPLE box checked, Distribution code 2 checked and taxable amount not determined/total distribution boxes checked.
What 2017 1099-R? Up to now (I think) you had not mentioned taking any distributions (conversion or otherwise) in 2017.

HomeStretch
Posts: 2052
Joined: Thu Dec 27, 2018 3:06 pm

Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by HomeStretch » Sun Oct 13, 2019 2:07 pm

^^^ This.

You said you did $0 2017 Roth conversions. What is the 2017 1099-R for?

Topic Author
schrute
Posts: 304
Joined: Wed Nov 05, 2014 2:27 pm

Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 2:14 pm

Hmm, let me go look. So I have 2 IRA and 2 Roth IRA accounts. One was a rollover from a previous employer (I contributed once to it in 2016) and decided to get a second IRA account. Maybe I converted that from in early 2017, but I don't recall (thought it was 2016).

This second account, I didn't do a conversion until 2018.

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FiveK
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Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by FiveK » Sun Oct 13, 2019 2:17 pm

schrute wrote:
Sun Oct 13, 2019 2:14 pm
Hmm, let me go look. So I have 2 IRA and 2 Roth IRA accounts.
Uh-oh....

Did you see the instructions for line 6 of form 8606, in particular the bolded word all?

retiredjg
Posts: 37828
Joined: Thu Jan 10, 2008 12:56 pm

Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by retiredjg » Sun Oct 13, 2019 2:21 pm

schrute wrote:
Sun Oct 13, 2019 2:14 pm
Hmm, let me go look. So I have 2 IRA and 2 Roth IRA accounts. One was a rollover from a previous employer (I contributed once to it in 2016) and decided to get a second IRA account. Maybe I converted that from in early 2017, but I don't recall (thought it was 2016).

This second account, I didn't do a conversion until 2018.
If you have traditional IRA accounts, the Roth conversions you have done would have to be pro-rated with those IRAs. It does not look like you have done that.

Topic Author
schrute
Posts: 304
Joined: Wed Nov 05, 2014 2:27 pm

Re: Filed extension, finishing up taxes, question about non-deductible IRA

Post by schrute » Sun Oct 13, 2019 2:24 pm

Ok went back through the history, here's the chronology of events:

IRA/Roth Account 1: On 1/5/2017 I did a contribution to the prior year (2016) and on 1/20/2017 I rolled/converted it to Roth (still account 1).

In IRA/Roth Account 2: On 4/17/2018 I did a contribution for prior year (2017) and on 8/20/2018 I rolled/converted it to Roth (in account 2) for the first $5.5K contribution; on 11/20 I made a contribution for 2018 and on 12/3 I converted it to Roth (still in account 2) for the second, totaling $11K.
Last edited by schrute on Sun Oct 13, 2019 2:29 pm, edited 2 times in total.

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