Hi,
I'm having a difficult time inputting the information into Turbotax premier 2019.
Here are the steps I've taken:
02/09/2018 Funded Roth IRA $5500
01/23/2019 Funded Roth IRA $6000 (limit went up)
Realized that for 2018 and 2019 my income was higher than what is allowed for Roth so I spoke to vanguard and they advised me to a do a recharacterization to Traditional IRA for 2018 & 2019 and then a conversion to Roth.
Note: I already filed my taxes for 2018 when I figured this out and in 2018 I had just shown that I had contributed to my Roth.
I did not file form 8606 for 2018 or 2019.
04/04/2019 Recharacterization of 2018 Roth to TIRA: $5964.92
04/04/2019 Recharacterization of 2019 Roth to TIRA: $6488.36
04/05/2019 Conversion of TIRA to Roth $12509.81
When I follow the "backdoor roth guidelines on turbotax" and then go to Tools >Forms> 1040 > line 4
> 4a shows distributions of $18998 and 4b shows taxable amount of $7010
My Questions:
1) From my understanding since I converted both the 2018 and 2019 Traditional IRA to Roth I will pay taxes on the excess for both in 2019.
I put in 5500+6000=11500 and I took out 12509.81 so wouldn't I only pay tax on the difference ie $1009.81 instead of $7010 (I think it is rounding up 7009.81)?
I am wondering if it's possible this is correct since the $7009.81 is taxable but then we have a $6000 adjustment. Please let me know if that is the way it is supposed to be?
2) Do I need to file form 8606 for 2018 and 2019 or only 2019? Does Turbotax do this for me?
3) Do I need to amend 2018 tax return since I had submitted it with the info that the $5500 went into a Roth and then afterward on 04/04/2019 I recharacterized it to traditional IRA to then backdoor it back into a Roth on 04/05/2019.
