Thank you. I reviewed your return.
You entered a value for all your traditional/SEP/SIMPLE IRAs on December 31, 2024, that isn't $0. It seems you had pre-tax funds in your traditional/SEP/SIMPLE IRAs and therefore the the pro-rata rule applies. This means that with each distribution/ conversion you will have a taxable and nontaxable part. You can see the remaining basis on line 14 of Form 8606, this basis can be carried forward.
The Backdoor Roth only works if your traditional/SEP/SIMPLE IRAs are empty. If you plan to use this strategy in the future you might want to think about a reverse rollover where you rollover IRA money to a company plan, like a 401(k). Only pre-tax funds can be rolled from an IRA to a company plan. Therefore, you would isolate the basis and could start the Backdoor Roth procedure fresh. But it only works if your employer allows it, not all plans do.
If the value of all your traditional/SEP/SIMPLE IRAs on December 31, 2024, is indeed $0 then please go back to the retirement section to edit your entry:
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- On the "Review your 1099-R info" screen click "Continue"
- Continue till you get to the "Tell us the value of Your Traditional IRA" screen and edit the entered value.
@kiddkevin01
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