[Editor's Note: Many high-income professional investors first learned about the Backdoor Roth IRA on this site. One of my most popular posts is the tutorial on the process. In the lengthy comments section of that post, many people asked how to handle a Backdoor Roth IRA (especially form 8606) if you contributed in the next calendar year. While it is “cleaner” to make your contribution and your conversion all in the same calendar tax year, you can make your contribution up until your tax filing date of the next year. I was going to write a post on the subject and then, lo and behold, a guest post on the subject showed up in my email box. The writer wanted to stay anonymous and we have no financial relationship.]
Maybe you are a new reader and just saw the light this January. Maybe you were reading up on the Backdoor Roth and December 31 flew by you. Maybe you are new to financial planning and weren’t sure if you’d have enough money to make the $6k contribution this year (Not very WCI of you! See, that’s where the planning portion kicks in). Or maybe you were waiting to see if you could afford your new boat and still have enough left over from your bonus to make the Backdoor Roth happen (please, please don’t let this be the reason — and if it is, for Pete’s sake, don’t admit it here!).
Whatever the reason, you have found yourself ready to do a Backdoor Roth for the previous year. You’re wondering if you can make a non-deductible contribution in 2015 to your 2014 traditional IRA and still get in the back door. If so, how do you do this?
How to Fill Out Form 8606 for Backdoor Roth Late Contributions
Great question. If you’re like me, you re-read the posts on Backdoor Roths here a million times trying to find the answer. You scour other websites but find yourself back here. You locate WCI’s generous image postings of how to fill out Form 8606 but can’t find an example of a procrastinator such as yourself who is contributing late. So instead, you head over to the IRS website, pull down the Form 8606 yourself, and try to make heads or tails of what seems like a foreign language, realizing of course that you are not a CPA but just a DIYer (that is my caveat emptor, by the way).
Below, you will see a Form 8606 filled out with 2014 values in the appropriate boxes, and the numbers for your 2015 Form 8606 in the margin on the right. Don’t worry, I’ll step you through it. Please note that this setup shows a conversion when there have been no gains in the prior year contributions so that there are no taxes due on gains.
Line 3 is your total tIRA contributions, including previous and current year. For 2014, that would be only the $5500. For 2015, that would be the $5500 for last year and the $5500 for this year. For the 2014 year, the answer to the Question in Line 3 is NO, so you enter the amount from Line 3 into Line 14 and skip the rest of Part 1. For your 2015 taxes, Line 4 represents the late contributions you made in 2016 to your 2015 tIRA ($0 since you were diligent this year) and Line 5 represents the late contributions you made in 2014.
Line 6 is the total value of your tIRA on December 31st, this is the information that will affect the pro rata rules. Since you have no previous non-deductible contributions because you have been a good little WCI minion and cleared out previous IRA accounts, this will be $0 as well.
Line 8 you skipped for 2014 because you answered NO to Line 3. In 2015, you will be converting the full amount in your tIRA to a Roth.
Line 11 is the non-taxable portion of your conversion — which, if you’ve done things right, should be the full amount you are converting — $11,000.
Line 14 is the basis in your tIRA for the current year and prior — which should now be $0 in 2015 because you just converted all of it to a Roth (remember, previously it was $5500 for the contribution year 2014 before you converted.)
Line 16 is the amount you converted to Roth. For 2014, that is $0, for 2015 that should be the full $11,000. Line 17 is the non-taxable portion that you converted. This should be $0 for 2014 and $11,000 for 2015. Line 18 is the taxable portion of your conversion. This should be $0 for both years since you did not do any conversion for 2014 and you converted only non-taxable (i.e. already taxed) portions of the tIRA for 2015. [Editor's Note: Whether you're doing your own taxes or paying someone else to prepare them, be extra sure to check that line and make sure it is zero. Many doctors have accidentally paid taxes twice on their Backdoor Roth IRA money.]
Looking Ahead
That should be it, you’re done! Now make sure to make your contributions in the future during the year for which you are contributing — remember, it’s time IN the market that counts, not timing the market!
What do you think? Any questions? Are you doing a Backdoor Roth IRA? If not, why not? Is there anything we can do here at WCI to make it easier for you? Comment below!
I graduated from state hospital fellowship in July 2021 and (finally) just received a withdrawal rollover from the state pension fund to my traditional IRA worth $7600. What is the simplest way to backdoor Roth all of this and avoid getting pro rata’d? I was thinking of converting $6000 now for 2021 year, contributing another $5400 to the traditional IRA later in the year, then doing another $6000 before 12/31/22, so that the traditional IRA is empty at the end of the calendar year. Is that the right move?
Secondly, will I have to pay taxes on my rollover since it was a state pension fund initially? Honestly I don’t even know if that fund was pre tax or post but I imagine it was pre tax.
Sorry, bad math. Meant to say “contributing another $4400 to the traditional IRA later in the year, then doing another $6000 before 12/31/22”
What do you mean “Backdoor Roth” this? You mean the simplest way to do a Roth conversion? Just move it from your traditional IRA To your Roth IRA and pay the taxes due on an extra $7,600 of income.
Then you can do a $6K Backdoor Roth IRA late for 2021 and a $6K Backdoor Roth IRA on time for 2022. Or heck, dump all $12K in, $6K for 2021 and $6K for 2022 and just do one big Roth conversion of all $20K. It’s really all the same as far as the IRS is concerned.
The rollover doesn’t cost you taxes, but the conversion will.
So the rollover i received from the pension doesn’t apply to the annual limits? I can convert all $7600 from tIRA to Roth now and still do $6k backdoor for 2021 and another $6k backdoor for 2022?
There is no limit on conversions, only contributions. So yes, you can do all that.
In Jan 2021, I made a deductible $6000 late contribution to tIRA for financial year 2020 (deductible because I wasn’t covered by 401K at work) and immediately converted the $6000 to Roth IRA.
Later in 2021, I made a non-deductible $6000 contribution to tIRA for financial year 2021 (non-deductible this time since I was covered by 401K) and also immediately converted the $6000 to Roth IRA.
Turbotax is telling me that $6000 of the distribution from tIRA in 2021 is taxable. Based on the pro-rata distribution rule, it looks like this might be correct, since ($6000 non-deductible)/($12000 total value of IRA) = 0.5, and thus (0.5 tax free ratio) x ($12000 distributions) = $6000 is non-taxable. Is this understanding is correct?
Thank you for the comprehensive information here about filing for late backdoor Roth IRA contribution!!
Yes, it is taxable. You got a tax break for it on your 2020 taxes and now you pay that tax break back. In the end, it’s all the same as if you had never gotten a deduction and never paid any tax. There’s no pro-rata issue here though because the balance of the IRA on 12/31/21 was $0, no?
I’ve had a Roth for years and didn’t realize that for 2021 I went over the income limit to be able to contribute directly. I contributed the max of $6,000 for 2021 and was diligent and have already contributed the max for 2022. I have already filed my 2021 taxes, so what are my options?
Can I still recharacterize the $6,000 for 2021 to tIRA and then do the backdoor contribution back to my Roth and file an amendment to my 2021 taxes? Also, can I do the same with my 2022 contribution, or would it be better to just pull that contribution out because I messed up? I can’t get any benefit from the tIRA because I have a 401(k).
https://www.whitecoatinvestor.com/ira-recharacterizations/
Yes. And yes, do the same with 2022.
I had 6K in my traditional IRA for 2022 on 12/28 and tried to do the conversion today 12/31 but it’s a Saturday and itwon’t clear through till 1/3/2023.
So I have 6K sitting in my tIRA…
Should I just cancel the conversion and leave the 6K in traditional IRA and pay the stupid tax?
Or just let it convert on 1/3/23 and deal with the tax filing with the my accountant.
Long time, first time.
-I contributed 6K into Roth IRA in early 2022.
-In February 2023 I realized we were over the MAGI limit so I then re-characterized but there was a loss and the original contribution was now $5,221.
-For line 1 on Form 8606, do I enter the amount that was re-characterized in Feb ’23 ($5,221)?
-Or do I enter the original Roth IRA contribution made in early 2022 (6K)?
I know this will make future 8606 forms more complicated so I want to make sure I start off with this first one correctly.
No. You enter the original contribution ($6K).
Got it.
-When completing Form 8606 in the following tax year will I enter this same amount (6K) on line 2?
-If yes, where and when do I account for the loss from the 2022 contribution (about $779) on form 8606?
I will also be contributing to the tIRA for 2023 (6.5K) and converting the entire account a few days later.
The loss gets carried over on the basis line, line 14, which then goes to line 2 on the next year’s 8606.
Hello again,
Really appreciate all you do for this community.
I’m now completing Form 8606 for 2023 and wanted to double check my work.
To review: I recharacterized my 2022 rIRA contribution in February 2023 to tIRA (realizing above MAGI limit) and the original 6k contribution for 2022, which had a loss of about $800, was recharacterized. I also made a tIRA contribution for 2023 (6.5K) and then made a Roth conversion for the entire account ($11,619.54) according to my 1099-R from Vanguard.
8606 for 2023
Line1: 6,500
2: 6,000
3: 12,500
4: 0
5: 12,500
6: 0
7: 0
8: 11,619.54
9: 11,619.54
10: 1.000
11: 11,619.54
12: 0
13: 11,619.54
14: 880.46
15a: 0
15b: 0
15c: 0
16: 11,619.54
17: 11,619.54
18: 0
Does that look correct?
I think so. Bummer about having to carry basis forward. Kind of a pain. I guess you won’t have to worry for a while about the “pennies” problem when the IRA makes money in between contribution and conversion.
Round all your numbers to the nearest dollar of course.
Thank you for all your guidance on this topic! I’m doing this for the first time and would appreciate a double-check here as fidelity is telling I can’t do what I’m trying to:
– I contributed 6K to a traditional IRA in March 2023 (listed this as 2022 contribution). Planning to fill form 8606 for my “2022” tax return.
– Money is now cleared and I’m trying to convert it to a Roth account (as 2022 contribution) but I got an error message so I called fidelity and they told me since this is being done after the Dec 31st deadline it’ll have to be considered “2023 contribution”. So basically I’m told I’m Ok to do this conversion for 2023 up to 6500 but unable to count it as 2022 contributions.
Am I missing something here or should I just call and talk to someone else?
Now you’re not doing a 2023 contribution or a 2022 contribution, you’re doing a Roth conversion and there are no deadlines on that. You can do a conversion of any size at any time. So if someone is telling you that you can’t do a Roth conversion as you describe to me, either they don’t know what they’re talking about or you’re not explaining very well what you’re trying to do.
If you’re getting an error message, you’re probably doing it wrong. I’d call back and talk to someone else and be very clear what you’re trying to do (do a Roth conversion on the $6K in your IRA.)
What if you already filed your tax return for 2021 when you decided to do a backdoor roth conversion for that year, i.e. filed the return early March 2022, but made the contributions in late March of 2022? I understand your forms and was able to figure out how to get TurboTax to use a previous year’s basis to get the conversions to workout, but do I need to do an amended return or fill out another 8606 for 2021? I basically just filled out the 2022 return and 8606 form to indicate that I had additional basis from 2021 or early years.
You really shouldn’t do your taxes until you have everything done for the tax year that affects your taxes. If you do that, you have to file an updated/corrected return, i.e. a 1040X with a new 8606.
Hello! Thank you for all the helpful information on your website and your videos. I may have found a new way to make mistakes on my backdoor contribution and wondered if you had thoughts about the best way to deal with it.
– In 2004, I made a $3000 traditional IRA contribution that was partially deductible. $1190 of the $3000 was not deducted. I don’t believe I filed a Form 8606. I do still have the 2004 Form 5498 to show the $3000 contribution and a copy of my 2004 tax return showing the $1810 IRA deduction.
– In 2020, I made a $6000 non-deductible traditional IRA contribution. I didn’t convert to Roth in 2020. I reported the $6000 nondeductible contribution on a Form 8606 line 1 but I didn’t report total basis in Traditional IRAs of $1190 on line 2. (I reported $0.)
– In 2021, I made a $6000 non-deductible traditional IRA contribution. I didn’t convert to Roth in 2021. I reported the $6000 nondeductible contribution on a Form 8606 line 1 — but I think I misunderstood what was supposed to do on line 2 and didn’t report total basis of $7190 on line 2 (I reported $0).
– In 2022, I made a $6000 non-deductible traditional IRA contribution. I did finally convert all of my traditional IRA accounts to Roth (I had 2 accounts) so my traditional IRA balances were $0 at year-end 2022. As you can imagine the accounts grew a bit from 2004 to 2022 so I have about $10,000 of a taxable amount for my 1040.
I’m trying to figure out how to deal with the error on the Form 8606 in 2020 and 2021. Should I amend my 8606 from 2020 to show a basis of $1190 on line 2, and also amend my 8606 from 2021 to show $7190 basis? Should I forget about trying to include the $1190 as a nondeductible contribution and just use $12,000 (instead of $13,190) as the total basis on line 2 and only amend 2021? Really appreciate it!
You can refile your 2020 taxes with a 1040X and a new 8606. Include a letter about your basis from 2004 and maybe even a copy of part of that tax return for proof. You can do the same for 2021. Thankfully you’ll then have it all cleaned up since you converted it all in 2022.
Hi WCI! First time doing backdoor Roth due to moonlighting income bumping me out of Roth limits. I screwed it up majorly:
-Contributed $1000 to a Roth (mistake #1)
-By the time I recharacterized $1000 Roth to traditional, I lost money and had $800 (mistake #2-not doing changes right away)
-Contributed $3500 more to traditional before December 2022
-Contributed the remaining $1500 to traditional in January 2023 (mistake #3-not contributing everything in 2022)
-Converted all the traditional ($5800 by that point) to Roth in January 2023 (mistake #4-not converting in same calendar year)
1. Based on the IRS guide, it looks like the recharacterized $800 goes on 1044 as a distribution. But does this mean that 8606 line 1 is $5800 or $6000 because of losses during recharacterizing?
2. Would Line 4 would be $1500 because of mistake #3?
1. 6000
2. Yes, $1500
None of this is a huge deal except you’ll be carrying $200 in basis forward each year, perhaps indefinitely.
Thanks! And you’re right, my 2023 will be $200 in line 14 and probably in perpetuity.
Aside from cluttering up the 8606, does the basis matter for tax liability? My initial thought was that it wouldn’t, since the $200 is too small to be reported as a misc itemized deduction anyway.
No. It’s actually an advantage. You know all those people who complain about the $4.37 their $6K that sat in the traditional IRA for 4 days made before they could convert it? You won’t pay tax on that because you’ve got $200 in losses saved up.
Hi,
I left this for too late. If I put money into a traditional IRA now and then convert it into a roth IRA for 2022, will it be too late? I know the money has to get into the IRA before 4/18/23 but does it have to be converted into the roth BEFORE 4/18/23 as well? Thanks! -Nicole
Hi,
I left this for too late. If I put money into a traditional IRA now and then convert it into a roth IRA for 2022, will it be too late? I know the money has to get into the IRA before 4/18/23 but does it have to be converted into the roth BEFORE 4/18/23 as well? Thanks! -Nicole
Yes, but you may have to do it via the Backdoor Roth IRA process.
Hi everyone! Great website. I made a lot of efforts to complicate backdoor conversion, to confuse my CPA and to made several mistakes along the way. Here are my history and questions of late contributions and backdoor conversions:
1. Contributed $7K to Traditional IRA for previous year 2020 on 05/07/21.
Should I report $7K contribution to Traditional IRA on 8606 for 2020?
2. Moved $7K from Traditional IRA to Roth IRA using backdoor conversion on 05/11/2021.
Should I report $7K backdoor conversion to Roth IRA on 8606 for 2021?
3. Contributed $7K to Traditional IRA for year 2021 on 04/13/2022.
Should I report $7K contribution to Traditional IRA on 8606 for 2021?
4. Contributed $7K to Traditional IRA for year 2022 on 04/13/2022.
Should I report $7K contribution to Traditional IRA on 8606 for 2022?
5. Moved $14K(2021 and 2022) from Traditional IRA to Roth IRA using backdoor conversion on 04/18/2022.
Should I report $14K backdoor conversion to Roth IRA on 8606 for 2022?
1. Yes
2. Yes.
3. Yes
4. Yes
5. Yes
Sounds like you understand how this works just fine.
Hello WCI,
1. Regarding the pro-rata rule, do I have to get rid of my military TSP balance before the Roth IRA conversion?
2. Can we have both a solo 401(K) and a Roth IRA at the same time? Can we contribute the maximum amount of 66K to solo 401K and 6500 on top of it to the backdoor Roth IRA in 2023?
Thank you,
Ken
1. No, the TSP is not an IRA.
2. Yes and yes
1. No.
2. Yes. Yes.
Our pleasure.
Hello WCI,
Assuming I currently have a Roth IRA with a brokerage I do not like and would like to do the backdoor IRA process with a different one, do I have to have the balance of this Roth IRA to be 0 before the process? Is it OK to have 2 Roth IRAs while doing this backdoor IRA transfer?
Thank you,
Ken
No.
Yes.
Hello,
Thank you so much for all the valuable information that is provided here! My question has probably been answered somewhere along this post, but I haven’t been able to find it:
Just for background, I have historically always made late Roth IRAs contributions in February/March (prior to the April deadline for previous year contributions) for the previous year using my tax refund that usually arrived around the same time (i.e. I made a $6,000 for each of my spouse and I in Feb 2022 for the 2021 tax year). However, 2022 was the first year that my income required that I now make my Roth contributions via the backdoor route, but I didn’t realize that my habit of making my late contributions made this method messy, especially using TurboTax (and no, I won’t be making late contributions anymore). So I’d love some help to make sure I’m doing this right.
So in Feb 2023 I made a backdoor Roth contribution for the 2022 tax year for $5,500 (I know the limit was $6,000, but for some stupid reason I already made a random $500 contribution for each of us in January of 2022 for the 2022 tax year) for each of my spouse and I. Then in November of 2023 I made a “normal” backdoor Roth contribution/conversion for the 2023 tax year for $6,500 for each of us.
I think I did everything right on my 2022 taxes (i.e. I reported the $500 Roth contributions and conversions for 2022, and the remaining $5,500 I reported only as contributions but not the conversions, since that would need to be reported on my 2023 tax return).
Now, for my 2023 tax return, I’ll be reporting a $6500 contribution each of us for 2023 as well as a Roth conversion for $12,000 for each of us ($5,500 for 2022 and $6,500 for 2023), but I’m not totally sure how to do this using the online version of TurboTax. Any help would be greatly appreciated!
Brian
Were you allowed to do that $500 direct Roth contribution? Or maybe it was backdoor too? If you weren’t and didn’t, you’ll need to recharacterize that. And it’s now too late to do that so I guess you need to withdraw that with its earnings and pay the penalty for that. Figure that piece out first. The rest is pretty easy. You just report the contributions on the 8606 for the year FOR which they were made and the conversions on the 8606 for the year IN which they were made. These posts should help.
https://www.whitecoatinvestor.com/ira-recharacterizations/
https://www.whitecoatinvestor.com/how-to-report-a-backdoor-roth-ira-on-turbotax/
https://www.whitecoatinvestor.com/late-contributions-to-the-backdoor-roth-ira/
Thank you for the help! I have been using those tutorials that you suggested, but since he doesn’t show how to report a late roth contrubtion on the step-by-step TurboTax tutorial and I don’t know how to see the actual tax forms on the online version, I just want to clarify that I’m doing this right:
– In the income section, I’ve listed $12,000 for each of us ($5,500 for 2022 and $6,500 for 2023) since this is where I report the conversions. And everything else should be the same as described in the tutorial (i.e. clicking “yes I tracked my contributions”, listing my basis as $0, listing the value of the traditional IRA as $0), correct?
– In the deductions section, I’ve listed $6500 contribution each of us for 2023 just the way he explains in the tutorial.
– After I did all this, it shows my tax refund being about $3,000 less than before I entered in this information, and I can’t figure out why.
– Is there a way to see the actual tax forms on the online version so that I can verify they are filled out correctly?
Thanks!
Brian Johnson
Sounds right, but keep in mind Turbotax changes from time to time and I haven’t used it in several years.
If your tax refund is changing you’re doing something wrong.
No, you need the downloadable version to use Forms Mode. I found it well worth the additional price when I was doing Turbotax.
I’m confused about the part where you say the old IRA needs to be converted first before contributing to the IRA for the year to avoid pro-rata.
My timeline is as follow :
– 01-02-2024 I converted the $18k of my old Simple IRA from a job I had 5 years ago to a New Roth IRA.
– Later this month, 01-31-2024, I want to contribute $6.5k for the year 2023, and $7k for 2024 into a New Traditional IRA.
– Ideally I would like to convert the $13.5k that will be in the New Traditional IRA to my Roth IRA (which has the $18k mentioned above already in it).
Am I going to get in trouble because my contribution for 2023 is actually happening in 2024 but the Simple IRA ($18k as of Dec 31st 2023) was not converted to the Roth IRA until January 2024
Your 2023 8606 will show the contribution for 2023 made in 2024. The conversions and the 2024 contribution will show up on the 2024 8606.
Your process sounds fine to me. There should be no issues with it. The pro-rata issue only occurs if you do a conversion that year. Since your conversions are all done in 2024, the only date where balances matter and pro-ration can happen is 12/31/24. You won’t have any money in a SIMPLE or traditional IRA on that date so there will be nothing to prorate.
Hi WCI,
I unfortunately made the mistake of another late backdoor contribution, and have yet to contribute to my 2023 Roth IRA yet.
In my case – I contributed to my 2022 IRA in March 2023, and did a backdoor. In my 2022 taxes, I filed Form 8606 Part 1.
I have yet to contribute to my 2023 backdoor Roth yet. In this case, do you recommend just skipping my 2023 contribution?
No. Just make it and report it properly. You can report the conversion you did in 2023 along with the 2023 contribution you make in 2024 on your 2023 8606. Of all the Backdoor Roth IRA “mistakes”, this is the least serious one. It’s not illegal or anything, just makes the paperwork slightly more complicated.
Thank you for the reassurance, and thank you so much for all of your resources.
I believe that I’ve completed Form 8606 correctly for my 2023 taxes. If possible, can you help provide a second look? I understand if you are too busy with dozens of other inquiries at this moment, I will try to do further research on my own before filing.
Here is the scenario: I contribute today (2024) the following amounts to Trad IRA and will perform a backdoor: $6,500 for 2023 & $7,000 for 2024. I converted 6,083.34 last year in 2023, (6,000 + 83.34 gains before conversion) according to my Fidelity 1099-R (this is for 2022 Roth contribution, as mentioned this was a late contribution). Last year was also my first time doing a backdoor Roth IRA.
Line 1: 6,500
Line 2: 6,000 (Line 14 from last year’s 8606, this was my first time doing a backdoor Roth IRA)
Line 3: 12,500
Line 4: 6,500
Line 5: 6,000
Line 6: 0 (Value of Trad IRA was $0.01 on December 31st)
Line 7: 0
Line 8: 6,083
Line 9: 6,083
Line 10: 6,000/6,083 = 0.986
Line 11: 6,000
Line 12: 0
Line 13: 6,000
Line 14: 6,500
Line 15a, b, c: 0
Line 16: 6,083
Line 17: 6,000
Line 18: 83 <— taxable income on the small gains
You’ll report your contribution on your 2023 8606 that you’re filling out now. You’ll report your 2024 contribution and the conversion on your 2024 8606. Which one are you trying to fill out? And if 2024, why?
2023 looks like this:
1 6500
2. 0
3. 6500
14. 6500
That’s it. Come back next year and we’ll talk about 2024.
Sorry – I feel like I might’ve created some confusion when I said “Last year was also my first time doing a backdoor Roth IRA.” This is also slightly confusing because I was a procrastinator for 2 consecutive years, but am hoping to clean this up right now. I hope this makes the timing a bit more clear:
March 2023 (late 2022 contribution & conversion): First time doing backdoor Roth: I contributed $6,000 to my 2022 Trad IRA, and converted. In my 2022 taxes, I filled out Form 8606 exactly as you outlined above in your comment (but 6,000 instead of 6,500 because the contribution limit was 6,000), strictly for the 2022 contribution. The conversion, which was $6,083 due to some gains, will be reported in 2023.
February 2024 (right now // late 2023 contribution & conversion, 2024 contribution & conversion): I plan to contribute & convert $6,500 (for 2023) and contribute & convert $7,000 (for 2024) this week. I am filling out my 2023 Form 8606:
Line 1: 6,500 (2023 Contribution)
Line 2: 6,000 (From 2022’s Form 8606 Line 14)
Line 3: 6,000 + 6,500 = 12,500
In 2023, I did a conversion, so moving on to Line 4:
Line 4: 6,500 (It’s asking to enter the amount in Line 1 that was contributed between Jan 1, 2024 – Apr 15, 2024. Because I am contributing 6,500 in Feb 2024, I believe this is correct?)
Line 5: 12,500 – 6.500 = 6,000
Line 6: 0 (Value of Trad IRA was $0.01 on December 31, 2023)
Line 7: 0
Line 8: 6,083 (Amount converted in 2023)
Line 9: 0 + 0 + 6,083 = 6,083
Line 10: 6,000/6,083 = 0.986
Line 11: 6,083 * 0.986….. = 6,000
Line 12: 0
Line 13: 6,000 + 0 = 6,000
Line 14: 12,500 – 6,000 = 6,500
Line 15a, b, c: 0
Line 16: 6,083
Line 17: 6,000
Line 18: 83 <— taxable income on the gains
Thank you so much for your help.
Oh fun. Looks like it took you two years to learn your lesson about this instead of the usual one. Still, not that big of a deal to report properly. For your 2023 taxes, you’ll report the conversion you did in 2023, which sounds like it was $6,083 and the contribution you did FOR 2023, which is $6500. Your basis coming into the year will be $6000. Your basis leaving the year will be $6500.
So it looks to me as I go through your 2023 8606 line by line that you did it correctly. Nice work.
Yes, I definitely learned my lesson haha. I’ll be performing the backdoor Roth every January moving forward, as you suggested.
Once again, thank you!
Hello, appreciate the great post! Quick question for you. I just deposited money into my traditional IRA electing a 2023 contribution (I did this in February 2024) and then I transferred the funds to my Roth IRA. I do not plan to do the 2024 conversion until later this year after my wedding. Do I report my contribution for tax year 2023 on my 2023 taxes or do I wait until 2025 when I file my 2024 taxes to report both 2023 and 2024 since I made the contribution in calendar year 2024?
I assume I would have to report it for 2023. If that is the case do I only complete lines 1,2,3, and 14 and then I am completely done?
Any recommendations on the simplest and best way for me to proceed are greatly appreciated.
Yes. Report contributions for 2023 on your 2023 8606. Yes, it’s super easy, just like 4 lines.
Thank you TWCI!
Hello! I’m very new to to this website and the backdoor ROTH IRA process as this is the first year my income has exceeded the contribution limits. I am having trouble with the Turbo Tax steps I’m trying to follow. In January 2024 I opened both a traditional and Roth IRA through Vanguard, deposited $6500 into the traditional and then did the ROTH conversion (all for 2023). My Vanguard account “dashboard” says I will not be receiving any tax forms (like the 1099R in your tutorial) so I’m not sure how to go about claiming/filling it out on Turbo Tax. I even called Vanguard and the person I spoke with said I won’t receive any tax forms because it’s “tax free”. I know this can’t be correct. Also I now have $1.88 in my traditional-should I transfer it somewhere? What advice do you have? Thank you so much, I appreciate all your help!
https://www.whitecoatinvestor.com/how-to-report-a-backdoor-roth-ira-on-turbotax/
All you’ll report on your 2023 taxes is the contribution. The conversion will be reported next year. Convert that $1.88 into the Roth IRA.
Thank you so much for your response. Are the steps in the link you shared what I would follow for next year’s filing for the conversion portion as I’m currently unable to do so for 2023 without the 1099R? Also, if I’m just reporting the contribution for 2023 do I say it was into my traditional IRA or Roth? Lastly, do I need to do anything with form 8606 or is that already included as part of Turbo Tax? Thank you!
It’s not that you don’t have a 1099R. It’s that you didn’t do the conversion.
You report the contribution into the traditional IRA. Turbotax will do the 8606s.
I believe the example at the link is for someone who did the contribution and the conversion in the same calendar year, so you may need to modify it slightly to fit your specific situation.
Hi WCI,
First of all – thank you for putting this website together. It is shockingly difficult to get concise information on this after scouring the internet, I have shared your website with all of my friends!
My question relates to a previous year contribution. For the year of 2023, I was over the income contribution limit. I planned to do the backdoor contribution for 2023, but alas lost track of time (a rookie mistake I will not be making again). I have not yet filed my taxes for 2023. My question is this:
– To make a late contribution, I fund a new 2023 Traditional IRA at $6,500, then convert that into my Roth IRA, and use the guide above to file the taxes that I have yet to file for 2023?
– Then what about 2024? Can I fund the Traditional IRA a second time (now with $7,000 due to higher limits) as a 2024 contribution, convert it to my Roth IRA, and then include this information when I am filing my taxes in 2024? Or will making the late contribution prevent me from doing this?
– If the answer to the above question is I can fund it a second time, can I just make the 23 & 24 contributions consecutively and then do one big conversion for both years? Or will combining the conversions like that have separate unforeseen consequences?
Essentially what I am asking boils down to: can I do the previous year contribution & conversion, as well as this year’s contribution & conversion both in calendar year 2024? Or should I just take the loss on 2023 and start my backdoor roth journey fresh in 2024 for the sake of simplicity?
It doesn’t have to be a new traditional IRA, but you ideally have no other pre-tax money in any traditional, rollover, SEP, or SIMPLE IRA to avoid pro-ration of the conversion step of the Backdoor Roth IRA process.
Yes, you can still do a Backdoor Roth IRA for the 2023 tax year. You can do your Backdoor Roth IRA for 2024 at the same time. The 2023 contribution will be reported on your 2023 8606 and the 2024 contribution and the conversion done in 2024 (for 2023 and 2024) will be reported on your 2024 8606. You can do it all as one big conversion.
For 2025 and going forward, try to do both the contribution and conversion during the calendar year to simplify your paperwork. But you can “catch up” in the way you’re describing just fine. You just need to report it properly.
No other accounts so good there.
That makes perfect sense – I think you highlighted what I was confused about from a tax perspective perfectly. I have to report the conversions in the year that they’re done, so in the 2023 tax forms I would only need to report the 2023 contribution. Then in 2024 I would report the contribution, and both conversions.
Thanks so much for your help – and yes going forward everything will be done in one year.
Thanks for all the help you’ve provided me and my family over the past few years. I wish I discovered this community sooner. Wanted to confirm I am doing the right thing regarding amending my prior 2022 return. I was less financially literate in late 2022, and turns out my contribution to tIRA done in late December was not converted until early 2023. I did not realize this and so reported the conversion on my 8606 for 2022. It seems I now have to amend the prior 8606 to put $0 for amount converted so that my basis is $6000 on my 2023 return and then report the full $12500 conversion (for 2022 and 2023). Is this correct? Do I have to explain this in my current return since the basis will be different than what they have on file until they process my amended return?
Definitely making sure to do contribution and conversion early in the same calendar year from now on! Thanks again!
Yes.
Wouldn’t be a bad idea to include a little note/statement. Certainly won’t hurt. But I don’t think it’s required.
Thank you so much for your guidance. I have a little wrinkle that I can not seem to find an answer for. Hoping you can help. I made the mistake of fully funding a Roth in 2022, and only caught it at tax time that I was over the income limit. In April of 23′ I recharacterized and converted back to Roth. I used your guidance to file 22′ taxes, and my 8606 looks correct for that year. I’m filing 23′ taxes now, and have entered my 1099r received for that transaction. Here is where my situation is a bit different: I am under the income phaseout again, so I do not need to do a backdoor roth for 23′, nor in the next 5ish years. I simply fully funded the Roth. As such, the tax software is not generating a form 8606. Is this normal? Will this be an issue for the IRS with the 22′ late back door and the basis carried over to 23′? Appreciate any insight as I have struck out seeking advice on multiple other avenues.
No, you need a 2023 8606 to report your conversion done in 2023. I can’t tell you how to make your software generate it though. Did you input that you did a conversion yet? I bet you haven’t. This post might help:
https://www.whitecoatinvestor.com/how-to-report-a-backdoor-roth-ira-on-turbotax/
There might be an “override” or “forms” mode where you can manually fill one out.
Hey there,
First off, big thanks for the insightful post—it’s been incredibly useful.
I find myself in a bit of a unique scenario—I only recently stumbled upon your post and utilized the backdoor Roth conversion for 2023 in April 2024. However, I had already filed my taxes for 2023 back in March 2024.
Now, I’m aware that I’ve landed myself in a bit of a peculiar situation. Would you happen to know what steps I should take regarding my 2023 tax returns? Should I wait to receive a 1099R from Vanguard(Not sure they will do that for 2023 Now) and then file for an amendment, or is this something I should address alongside my 2024 tax returns in 2025?
For 2024, I’m not planning to delay—I intend to execute the backdoor Roth promptly.
What course of action would you recommend? Thanks a bunch for your guidance!
Yes, send in an 8606 showing a 2023 contribution now. No biggie. If you want, you can send a 1040X with it, but you probably don’t need to since your tax bill for 2023 won’t actually change.
Thanks for the response. I am following this link for filing in turboTax https://www.whitecoatinvestor.com/how-to-report-a-backdoor-roth-ira-on-turbotax/
So i directly go to step #2 as i will not have a 1099R for 2023 ?
Please suggest
No, I’d still expect a 1099R.
Your information has been hugely helpful, thank you so much! I tried sifting through comments to see if you had previously addressed my circumstance, but I’m not sure I’m seeing it.
April 15, 2024: contributed $2292 to a new traditional IRA (It was a fast solution before filing to correct having put too much into my Roth—first year married, my husband & I didn’t realize we’d hit the limit.)
I didn’t do the rollover until June 2024 (stupid, I now know). $2353 was rolled over ($60 taxable gain).
My question: Can I still count that rollover on my 2023 taxes? If I amend my tax return/pay the $60 gains? Or, because I did the conversion after April 15, does this all become part of my 2024 tax return?
My hope/plan was to contribute the full $7000 to my traditional by December 31, 2024, and to roll it over quickly so there are no gains. But now I’m confused & wondering if I can only actually contribute $4708 (to bring my 2024 total to 7000)?
One way or another I want to get this handled by Dec 31, 2024 so I can start following your logic for 2025 and beyond (contributing & immediately rolling over in January) for cleaner/simpler 8606’s.
Thank you so much for any help/insights!
I’m not sure you’re using the right terminology. By rollover do you mean conversion? Conversions are reported on the tax return for the year in which they are done, in this case 2024.
There are limits on contributions, not conversions or rollovers.
Shouldn’t line 4 for 2014 be 5500 because the 2014 contribution was made in 2015?
It’s been a decade since I wrote this post. It’s possible I got it wrong I suppose. Line 4 on the current 8606 is contributions made for the prior year in the next year. So if the max contribution for a year is $5,500 or $7,000 or whatever, that’s the most you can put on line 4.