dmertz
Level 15

Retirement tax questions

The timing of the Roth conversion just determines which Form 8606 reports the Roth conversion.  If the Roth conversion occurred in 2020, both the 2020 nondeductible traditional IRA contribution and the 2020 Roth conversion go on the 2020 Form 8606..  If the Roth conversion occurs in 2021, the nondeductible traditional IRA contribution goes on the 2020 Form 8606, and the Roth conversion goes on the 2021 Form 8606.  Basis carries forward from line 14 of the 2020 Form 8606 to line 2 of the 2021 Form 8606.

 

People get confused because they term "backdoor Roth" makes them think that it's is some sort of combined transaction.  It's not.  It's two transactions, a nondeductible traditional IRA contribution for some year and a separate Roth conversion in some year.  Depending on the timing, both might appear on the same Form 8606 or not.  Each transaction must be entered into TurboTax without regard for the other.  (The traditional IRA contribution might be the result of a recharacterized Roth IRA contribution, but that's taken case of in TurboTax during the entry of the original Roth contribution, with the result being reported as a traditional IRA contribution, still entirely separate from any Roth conversion.)