backdoor roth conversion
i converted traditional to roth IRA. however given my income, i already paid taxes on the income i contributed. how does tax filing works in my case
Comments
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You'll receive a 1099-R from the brokerage indicating the conversion. FTUSA will guide you through prompts on what you did with that conversion and you'll indicate a transfer to your Roth IRA which will generate a form 8606 within FTUSA. As you noted, you already paid taxes on the income you contributed so only the net proceeds (gross proceeds including gains less your contribution) will be added to your income.
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The full amount you withdrew from the Trad IRA will be taxed. Your IRA company will send you a 1099R with that amount and you will put that in your tax return. You may be taxed a penalty 10% if your are under 59.5 YO and do not have a qulaified expemption.
FYI, you have not "paid" the income tax, you had an amount withheld to offset the tax. Your tax return is the way you reconcile true tax owed (from all sources) vs amount withheld to see if you owe or get a refund.
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mcdaniel_dean is correct unless you only contributed after-tax funds for the sole purpose of doing a backdoor conversion. In this case, the income you contributed will already be included on your W-2. One other thing to note is that if you have other IRAs open and only converted a partial amount of the sum, you will be affected by the pro-rata rule which looks at your total IRA values against what you converted - this may cause you to owe taxes on the backdoor conversion.
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i contributed the post tax amout to the traditional IRA for sole coversion to ROTH
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Hi RD007,
Thank you for joining our live event.
The article linked below will help you with entering the information in the software to accurately report your backdoor Roth situation.
