Retirement tax questions


@Anonymous wrote:

@macuser_22

 

 

I am trying to enter this "back door" information but the software is trying to steer me one way, and your post is going the other way!!


A backdoor Roth is actually very simply - it is just two transactions

 

1) A non-deductible Traditional IRA contribution reported in the tax year that the contribution is *for*. And

 

2) Converting that Traditional IRA to a Roth  and reporting that in the tax year *in* which it was converted.

 

If the two transactions spanned tax years then #1 is reported in one tax year and #2 the next tax year.

 

(Most people run into trouble because they fail to do #1 and then do not have the required 8606 form to do step #2 so it all ends up being taxable.)

 

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**