How to Report Backdoor Roth IRA

Forum|Forum|5 years ago
March 9, 2021
5 replies
37 views

Looking for guidance on how to report a backdoor Roth IRA.

ProSeries Basic

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qbteachmt

Level 15

Basically a type of conversion, from Basis (nondeductible Traditional IRA) to Roth (which is always nondeductible).

And your client has to have No Other Basis or value in any Traditional IRA or tax deferred account, for this to work. Otherwise, you have a regular conversion with a taxable percentage.

Example:

They already have $5k in SEP-IRA. They put $5k into a Traditional IRA post-tax, and roll it to Roth as "backdoor" but what they did is take a 50% taxable distribution for conversion, indirectly.

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K

kmsmith1Author

Level 3

I have a client that in 2019 made Roth IRA contributions of $6k. However, the client was over the income threshold. On 6/3/2020, before filing 2019 taxes, the client recharacterized the Roth contribution to Traditional IRA to correct the Roth contribution. On 6/5/2020, the traditional IRA was converted to Roth IRA as a backdoor Roth IRA. Both transactions were completed before the tax filing date of 7/15/2020.

For 2020, the taxpayer contributed $6k to the Roth IRA and was not above the income threshold. How should this be reported in ProSeries Basic for tax year 2020?

qbteachmt

Level 15

Okay, before the filing, it was not Removed. It was put to Traditional, for 2019 or for 2020?

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