Hello Turbo Tax family!
I am 59 ½ years old (will be 60 in a few months) and wanted to ask about tracking IRA basis.
I am still working a 40+ hour a week job. Since my AGI exceeds the IRS limit to contribute to a Roth IRA, I started making annual Traditional IRA conversions to my Roth IRA (i.e. back door contributions).
Q1 – Each year I make a lump sum non-deductible contribution to my Traditional IRA and then a few days later (same year) I convert 100% of the non-deductible Traditional contributions to my Roth IRA, leaving $0.00 in my Traditional IRA. Does my Traditional IRA have a basis?
Q2 – Does a Roth IRA have a basis? (I’ve read “Roth IRA contributions and Roth conversions are all basis since those funds have already been taxed.")
Q3 – Since I am 59 ½, do I need to keep tracking basis for either a Traditional or Roth IRA?
I’ve read that Roth Basis only comes into play for tax purposes should I withdraw money prior to age 59 ½. Once a Roth IRA is held for 5 years and the owner is over 59 ½ yrs old, Roth IRA basis no longer matters and all contributions and earnings are tax free. Is this a true statement?
Thank you for your help!
[name removed]
