This so-called “back-door
Roth” method ONLY works if you have NO OTHER Traditional IRA accounts. If
you do, then the non-deductible part must be spread over ALL accounts and
cannot be withdrawn by itself. Only if you started with NO Traditional
IRA and ended up with a zero amount in ALL Traditional IRA accounts will this
Roth conversion not be taxable.
First you must enter your Traditional IRA contributions (if there were 2017
contributions ).
IRA contribution
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),,
Retirement & Investments,
Traditional & Roth IRA contribution.
Be SURE to answer the follow up that the are choosing to make this contribution
NON-DEDUCTIBLE - if that screen comes up. (DO
NOT say that you moved (recharacterized) the money to a Roth) – this is a
conversion, not a recharactorazition.
Then enter the 1099-R that shows the distribution.
Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),,
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).
Answer the follow-up questions answer the question that you moved the money to
another retirement. The screen will open up with choices of where it was moved.
Choose you converted it to Roth IRA.
When asked if you have made any non-deductible contributions say "
"yes" if you did then enter the non-deductible contributions made for
tax years before 2017. (Usually zero unless you also made a
2016 or earlier non-deductible contribution).
Enter the 2016 year end value of your Traditional IRA a "0" (zero) -
if it is in fact zero - this tax free Roth conversion will not work if it is
not zero. Enter the 2016
non-deductible contribution here.
The non-deductible amount of your contribution will be subtracted from the
taxable amount of the conversion on then 8606 form and enter on line 15a of
them 1040 form and a zero taxable amount on line 15b if you did it right.
