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Tracking basis in a Roth matters if you take out an early distribution. In that case, you are allowed to withdraw the amount of your contributions tax and penalty free. However, your growth can be taxed and subject to early distribution penalties. Once you reach the point where you can receive a distribution tax and penalty free, your basis is less critical.
However, if you do need to know your basis because of early distributions, it is the total amount of Roth Contributions you have made over the years, or full conversions of TIRA accounts to a Roth.
Tracking basis in a Roth matters if you take out an early distribution. In that case, you are allowed to withdraw the amount of your contributions tax and penalty free. However, your growth can be taxed and subject to early distribution penalties. Once you reach the point where you can receive a distribution tax and penalty free, your basis is less critical.
However, if you do need to know your basis because of early distributions, it is the total amount of Roth Contributions you have made over the years, or full conversions of TIRA accounts to a Roth.
I am more interested in the first question of the post.
Why do I need to enter the Roth Basis every year if Turbo Tax is tracking the basis for me?
Thanks.
How does Turbo Tax keep tally on how much I paid to my IRA account and where can I find that info?
Form 8606.
What if there was no Form 8606 filed?
The 8606 is only filed with your return on the year's that you have nondeductible contributions.
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