every year that I file (for the last 5 years), I do two things:
- I contribute the max $5,500 for that tax year I'm filing, but always do so in the following year's Jan-April period and report that contribution in my April 15 tax filing
- I ALSO convert that entire amount to a Roth right after I do the contribution (within a week), leaving the traditional IRA account balance $0
I am very much aware that my 8606 reporting is supposed to be providing information on my current tax year's (*for tax year*) contribution AND the previous tax year's (*within tax year*) conversion event.
Given this constantly staggered way of doing this, I thought my 2017 8606 was actually correct since it is 1) showing my tax year 2017 $5,500 contribution that was made in Jan-April 2018 AND 2) is showing the $5,500 basis that represents the Roth conversion of 2016's $5,500 contribution that I performed in Jan-April 2017. The $5 of taxable amount on line 18 is simply the minimal earning that transpired within the 3 or so days the 2016 contribution sat in the non-traditional account before I converted it all to Roth.
So, my thinking was that 2017 filing is correctly done based on how I do my contributions and conversions and that it was my 2018 filing that screwed up my modus operandi. Somehow in 2018 filing, the $5,500 I contributed in Jan-April 2019 for tax year 2018 did NOT get recorded as being done in Jan-April 2019, thus effectively screwing up the software's understanding of my basis (which I think should always be around $5,500 if I am always doing my contributions the following year before tax deadline while also reporting the previous year's conversion event.
Am I making sense or am I losing it??
