TT EZstep not properly handling Backdoor Roth. Entered t-IRA contrib'n (non-deductible), then 1099R t-IRA dist'n, indicating converted to Roth & year end basis zero.

williasp · ‎June 1, 2019

TT EZstep is not completing the backdoor roth transaction properly. It is counting the t-IRA distribution as taxable unless I manually correct the 8606 form. I've indicated the t-IRA contribution is non-deductible, and the t-IRA distribution was converted to Roth, and I've indicated the year end basis of the t-IRA was zero. I ran into this same issue last year. The EZ step process needs to be fixed. Please!!!

williasp · ‎June 1, 2019

After speaking with TT and running through the steps together, I found the issue that will resolve this. It is important to answer the first question correctly when doing the IRA contribution section under "Deductions."

That question is: "Select the kind of IRA you OWN or will contribute to in 2018." You need to check BOTH boxes for Traditional IRA and Roth IRA. That answer triggers the correct follow up questions that properly completes the 8606.

I pointed out it is easy to miss this since one assumes you are only reporting here the actual contribution to the traditional IRA. But the word "own" means you also owned the Roth IRA during the year.

TT EZstep not properly handling Backdoor Roth. Entered t-IRA contrib'n (non-deductible), then 1099R t-IRA dist'n, indicating converted to Roth &amp; year end basis zero.

Retirement tax questions

TT EZstep not properly handling Backdoor Roth. Entered t-IRA contrib'n (non-deductible), then 1099R t-IRA dist'n, indicating converted to Roth & year end basis zero.