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Error In back door Roth by tax accountant

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  • Error In back door Roth by tax accountant

    So... I get a letter from the IRS saying I owe 4k in taxes due to my "retirement income that is taxable" as vanguard sent them in 1099R of 5500$ for both me and my spouse of 11K

     

    they are increasing my taxable income by 11K, therefore, saying I owe  4k in taxes...

    Now is as simple as my tax accountant didn't fill out the 8606 form..

    OR did my tax accountant include the 11K as a deduction (even though I told her ten times it is a non-deductible IRA!!!!!!) and then the IRS is correct, and I do indeed owe them 4k as this 11k shouldn't have been deducted.

    any help would be appreciated...

     

    Thanks!

     

     

     

  • #2




    So… I get a letter from the IRS saying I owe 4k in taxes due to my “retirement income that is taxable” as vanguard sent them in 1099R of 5500$ for both me and my spouse of 11K

     

    they are increasing my taxable income by 11K, therefore, saying I owe  4k in taxes…

    Now is as simple as my tax accountant didn’t fill out the 8606 form..

    OR did my tax accountant include the 11K as a deduction (even though I told her ten times it is a non-deductible IRA!!!!!!) and then the IRS is correct, and I do indeed owe them 4k as this 11k shouldn’t have been deducted.
    Click to expand...


    Of course you're not really asking the forum what has happened because there is no way for us to know.

    Do you have a copy of your tax return? Was form 8606 completed for you and spouse? How about your form 1040, is line 15a 11,000 and line 15b 0?

    Let us know. The mistake may in fact be on the part of the IRS. These CP2000 notices are quite common.

    Comment


    • #3
      Did you look at your tax return.....

      Comment


      • #4
        Was it for 2016?  A lot of people (myself included) have gotten these notices from the IRS for 2016.  The notice could well be flat-out wrong.  I had to burn an hour of my time (and money on a fax) to deal with it, but they dropped the issue.  Really freaking obnoxious.

        Comment


        • #5
          Yes it was for 2016!!! That’s why I asked the question in case anyone else was having the same issue, what was the problem with yours?

          Comment


          • #6


            what was the problem with yours?
            Click to expand...


            i didnt have a problem, you still havent said what yours was....?

            Comment


            • #7
              Check your 1040, and check your whole return to see if you filed 8606.

              If it has an IRA deduction, you'll need a 1040X and an 8606 for the year(s) in question.

              If not, then the IRS just needs to be told that the IRA distribution (Roth conversion) was of non-deductible basis, and you only need to file an 8606 for the year(s) in question.

              Step 1 is checking your return...so obtain that, and keep us updated.

              Comment


              • #8
                I'm still not sure.. but sending in the 8606 again to see what they say. sending today.

                Comment


                • #9




                  I’m still not sure.. but sending in the 8606 again to see what they say. sending today.
                  Click to expand...


                  how is it that you're not sure?

                  1) did you claim a tax deduction for IRA contributions for yourself and spouse in 2016?

                  2) did you file form 8606 for each of you with your 2016 return? if so was it completed accurately?

                  you should know the answers to these questions, definitively

                  Comment


                  • #10
                    See what I mean about it not necessarily being worthwhile to do the Backdoor Roth?

                    Hopefully, everything was done correctly and this can be laid to rest. If not, you may have to amend the return, but you should not be forced to pay taxes on money that was already subject to income tax.

                    Good luck!
                    -PoF

                    Comment


                    • #11
                      And make sure you explain to IRS that you are doing a “backdoor roth”

                      I kid.

                      Comment


                      • #12
                        Suggestion: see if this can be resolved by getting an agent on the phone. Explain that you made a non deductible ira contribution and later converted to roth, and that no tax should be due. Might work.

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