I need to adjust my 2015 return.

[dante-marinucci]

In January 2016, I made an $11,000 contribution to a traditional IRA and then converted that amount in its entirety to a roth IRA (what I understand is a backdoor roth).  I intended to have half the amount apply to 2015 and half to 2016 so that I would stay below the limits.  I think I need to adjust my 2015 return to reflect this, but I am not certain.

[ChristinaS · Accepted solution]

A conversion occurs in the calendar year that it literally happened. While you can make a 2015 tax year IRA contribution in 2016 for 2015, the Roth conversion cannot be retroactively applied to 2015.

That being said, with a backdoor Roth, you keep the Traditional IRA contribution nondeductible. So, all else aside, the nondeductible contribution establishes "basis" on Form 8606 and keeps the conversion tax-free**.

If done correctly, the conversion to a Roth isn't taxable anyway. You would have $11,000 in nondeductible Traditional contributions. That would offset the 1099-R for the conversion, with only the earnings being taxable. If you did the conversion close to the contribution, the earnings would be small or nothing at all.

• Did you make the $11,000 contribution in 1/2016 for 2016 or for 2015?
• Did you have a deduction for the Traditional IRA contributions? (If you make enough money that you need to do a backdoor, it wouldn't make sense for you to have had a deduction)
• Do you have the 1099-R for the conversion in 2016? How much is on that? Close to $11,000?

** A conversion is tax free when you don't have anything in a Traditional IRA by the end of the year (in this case, 12/31/2016)

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