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Get your taxes done using TurboTax
It depends on how the information flows on your 8606. Here is the way it should look.
- Part I of Form 8606 is where you report the non-deductible contributions to your Traditional IRA (contributions made to your Traditional IRA).
- Line 1: You’ll report the total non-deductible contribution made to your Traditional IRA (e.g., $6,000).
- Line 2: This will calculate the total basis in your Traditional IRA, which is the sum of your non-deductible contributions. (In this case, $6,000).
- Part II of Form 8606 is used to track the Roth IRA conversion.
- Line 16: You report the total amount converted from the Traditional IRA to the Roth IRA. This would be the $6,000 you converted in this example.
- Line 17: If the entire amount was a non-deductible contribution (as in this case), the amount converted will also be non-taxable, and Line 17 should reflect the same amount ($6,000).
- Line 18: This is the taxable amount of the conversion, but since you contributed after-tax money to the Traditional IRA, this should be zero.
- This part will ensure that the $6,000 you converted to your Roth IRA will not be taxed again when you take it out in the future.
In your particular case, the Traditional IRA contribution is reported in Part 1 of the 8606, then converted. The Roth conversion is reported in part 2 so that the converted amount is non-taxable. Your 8606 must have this information I described above to make certain the form accurately reflects these transactions.
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January 20, 2025
11:52 AM
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