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Pro-rata rule on Backdoor Roth
Hi Experts,
I rollover total of 88830 (pre-tax) from my 401K to IRA in 2024. Also, I made a contribution of 7000 dollars (after-tax, non-deductible) to IRA then convert all 7000 to Roth IRA (through backdoor Roth). I then realized that based on Pro-rata rule, I have to pay tax on the 7000 converted to Roth IRA.
On Turbo Tax, I entered:
IRA basis from Form 8606 : 28895 (information I get from my 2023 tax form 8606)
2024 Year end IRA: 88830 (not including Roth IRA)
Then, I can see the taxable amount from 7000 in the 1040 is 4384. And My Feb tax amount seems right (which is about 25% of 4384). However, my California Tax amount increased 2614 more, which is about 60% of the 4384.
Can anyone help me to figure it out why?
Is there a way I can know the taxable amount in California on TurboTax for the IRA portion?
8606 IRA basis | 2024 Year end IRA | Taxable amount from 7000 | Feb tax | California Tax |
28895 | 88830 | 4384 | 1132 | 2614 |