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Get your taxes done using TurboTax
Moving money from a traditional IRA to a Roth IRA is usually a taxable event because you are putting never taxed money (traditional IRA) into an after tax account (Roth). This is called a conversion, not a rollover.
The exception to this rule is if you have after tax money, or "basis", in the Traditional IRA. In that case, some or all of the conversion would not be taxable. A popular technique called a Backdoor Roth IRA utilizes this.
A Backdoor Roth IRA only works if well if nearly all the money in the Traditional IRA money is post-tax. The IRS does not allow you to cherry pick, so when you say you convert a "portion" of your Traditional IRA every year, a portion would be considered pre-tax even if the pre-tax money was segregated in another account.
TurboTax allows you to enter an after tax basis for a Traditional IRA.
- Type ira contributions in Search in the upper right
- Select Jump to ira contributions
- Select Traditional IRA even if you did not make an traditional contributions
- Keep going until you see Any Nondeductible Contributions to Your IRA?
- Type YES and enter the amount of after-tax money in the account. This should reduce your conversion amount.
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