Retirement tax questions

If you don't pro-rate the conversion, you will pay tax again on the non-deductible contributions, and you will break the chain of paper trail that documents the non-deductible contributions, so you won't be able to claim a pro-rated non-taxable conversion in the future even if you wanted to.   If it's a small amount, it's up to you if you want to pay the tax twice so save the hassle.

 

You need your form 8606 from your most recent tax return that has the form. Form 8606 is created when you make non-deductible contributions or conversions, but you don't get a new form in a year when you don't do those things.  So if your last non-deductible contribution was many years ago, you need to go back to that return to get the form.   Form 8606 is a form you should keep copies of your whole life, or until the IRA is closed.  It is an exception to the rule that tax papers can be discarded after 3 or 6 years.

 

Turbotax will ask the necessary questions, and create a new form 8606 using items from the old form 8606 and the current year conversion information, that calculates the non-taxable portion of the conversion and the non-deductible basis remaining in the traditional IRA.