Backdoor Roth Filing Issue

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Spartiates
Spartiates Member Posts: 1 Newcomer
edited March 17 in Filing my taxes

I followed step by step the Reporting a Backdoor Roth – Basic Scenario https://community.freetaxusa.com/kb/articles/59-reporting-a-backdoor-roth-basic-scenario but my Roth conversion is not being generated properly. I can contribute directly to Roth IRA with my income(MAGI) but I did the Backdoor to learn the tax filing process.

  1. In 1040 its showing 4a. 6500$ and 4b. 6080$. I should not be having any taxable, if any it should be minimal let alone 6k plus. Since I did roth conversion in the same day where the funds in Traditional IRA was in and out the same day into Roth IRA. So I should have not accrued any interest.
  2. Form 8606 its showing Part I Line 1 420$ it should be 6500$ and in Part II Line 16 6500$, Line 17 420$ and Line 18 6080$
    Line 17 should be 6500 and not 420.

Answers

  • kiarab
    kiarab FreeTaxUSA Agent Posts: 58
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    Hello,

    It can be hard to pinpoint exactly what is going one when we cannot see your return. It sounds like you are not having enough of an IRS basis to reduce the taxable amount of your Roth IRA conversion. Did you perhaps qualify for the IRA deduction with your traditional contributions? You should be able to see it on the Summary page if you are getting thoat. If you get a IRA deduction, it reduces the amount of non-deductible contributions you have when you contributed to your traditional IRA (before the conversion) that is being reported on line 1 for form 8606. If you are getting the deduction, it should hopefully be cancelling the taxable Roth amount out.

    If you are still not sure, the best thing would be to contact our customer support. They can review your account and see where there may be a possible error or at least explain why your Roth Conversion is being taxed.