IRA basis in Easy Guide and mega backdoor

[HH2013]

In the process of reporting my current year (2024) backdoor Roth conversion, TurboTax 2024 desktop has “Easy Guide” to find my IRA basis and the information is stored on an “IRA information Worksheet” under Forms. My questions are:

1. Is using Easy Guide necessary or useful (for future years)? I already track the history of my various Roth contribution/conversion/rollover on my own.
2. I made rollover in the past from a saving plan at my employer to Roth (mega backdoor). How do I report that in Easy Guide? A possible option on the checklist is “transfer money from an employer’s retirement plan to an IRA…” Then what?

Thank you

[dmertz]

1.  Using the EasyGuide button is used to report an adjustment to your basis in nondeductible traditional contributions.  Adjustments to you basis in nondeductible traditional IRA contribution typically come from rolling over after-tax money to one of your traditional IRAs, receiving some of an ex-spouse's basis via a transfer incident to divorce, or inheriting a spouse's IRA that you choose to treat as your own and the deceased spouse had basis in nondeductible traditional IRA contributions.

2.  The EasyGuide button would normally have nothing to do with a mega-backdoor Roth because the rollover of the after-tax funds from the employer plan should go directly to the Roth account and not to a traditional IRA.  However, the the after-tax funds were instead rolled over to a traditional IRA and were later converted to Roth from the traditional IRA, a basis adjustment would be needed as described in #1 above.

TurboTax's  tracking of your basis in Roth IRA contributions and conversions is separate from the tracking of your basis in nondeductible traditional IRA contributions.

[HH2013]

Thank you. To clarify, are my answers to Easy Guide used to generate the IRA information worksheet that I see in "Forms"? And it is just for TT and me, and not a formal form that IRS needs in the future when I start to make withdrawals?

[dmertz]

The answers influence the preparation of Form 8606 and the results from Form propagate to the IRA Information Worksheet.  The worksheet is internal to TurboTax as part of your records.  It is not part of your filed tax return.  When needed, information from the worksheet is used to prepare your filed tax return, particularly Forms 8606 and 5329 that depend on details carried forward from past tax returns.  The IRA Information Worksheet is similar to TurboTax's Carryforward Worksheet but exclusively carries information specific to your IRAs.  If married filing jointly, each spouse will have a separate IRA Information Worksheet (which is why it's separate from the Carryforward Worksheet which carries joint information).