backdoor IRA question : how to correctly report form 8606?

[Jayyyyy]

Hi,

Here's my situation : Married filling jointly, backdoor IRA for both.

Our tIRA contribution dates :

(1) me : $6500 for 2023 in 2023, $7000 for 2024 in 2024

(2) my wife : $6500 for 2023 in 2024 (before 2024/4/15), $7000 for 2024 in 2024

-> these were all converted to Roth IRA right after.

Our 8606s right now :

In tax return 2023, our 8606 line 1 shows only $6500 (because I thought that I couldn't include my wife's $6500 contribution in 2024, due to lack of 1099-R).

Now in tax return 2024, 8606 says $13500 is taxable.

Cleary something's wrong, but I'm not sure how to fix this. Any comments would be highly appreciated.

[DanaB27 · Accepted solution]

Your wife also should have a 2023 Form 8606 with a basis of $6,500 on lines 1, 3, and 14. This basis has to be entered in the 2024 return when TurboTax asks “Any Nondeductible Contributions to Your IRA?”.

You need to fill out the 2023 Form 8606 for your wife and send it to the IRS.

Please review How do I enter a backdoor Roth IRA conversion?

[Jayyyyy]

Thanks @DanaB27 , so I have to put $6,500 when asked "Let's find your IRA basis", even if it says "Total Basis as of December 31, 2023" (which is technically not true, as the contribution was after 2023/12/31), correct? On 2023 form 8606, the line 14 "your total basis in traditional IRAs for 2023 and earlier years" has $6,500.

[Jayyyyy]

Now I think everything looks good ; I didn't do Step 2 of the guide.

But now,  got one more question. 1040 line 4b shows "ROLLOVER" (right next to a small amount from daily interests), would this be ok even though it's a conversion, not a rollover?

[DanaB27]

Yes, you correctly entered the $6,500 "Total Basis as of December 31, 2023".

It seems you entered a rollover instead of a conversion. Please review the step 2 instructions how to enter the conversion.

[Jayyyyy]

Yes that was right! I appreciate your answer.

For self note :

in Step 2-8: "Select I did a combination of rolling over, converting, or cashing out the money. Then, enter the full amount in the box next to Amount converted to a Roth IRA account and Continue."

-> select the second box "Amount converted to a Roth IRA account", not the first one for the rollover!