Need assistance with reporting Roth/Trad IRA contributions over multiple years

[debiandtim]

We were advised to contribute the max allowable amount to traditional IRA accounts in 2023, and complete a conversion (aka back door Roth IRA). However, in the same tax year, my husband withdrew and rolled over his retirement to a traditional IRA. My understanding is that the IRS considers the retirement accounts as one large pool and converting any portion of the IRA subjects his total to taxes. Our CPA did not catch this in 2023, which is a whole other issue (unless I'm wrong), but it's created a cluster for filing our taxes in 2024 and now 2025.

I sent in the amount we owed, but have not been able to file 2024, so I'm actually looking for help on how to report everything. The CPA did not record the portion converted to Roth as excess, but he did report a basis for both of our taxpayer IDs because there were previous years we had contributed to Roth IRAs using after tax dollars, where we didn't document anything because the 5498 comes out way after the filing date. (Yes, this has been a series of missteps and learning opportunities.)

Currently, I'm trying to determine what amounts should be entered into the taxable and nontaxable conversions boxes for Roth IRA contributions in tax year 2023. Because we already paid taxes, it seems the full portion that was converted to Roth IRA should be nontaxable. I'm tripping up on the 'excess contributions' amount. We didn't contribute more to the Roth than was allowed for that year, and amount we rolled over from the 401k still lives in the traditional IRA. 

Can someone confirm whether I am on the right track? Also, what's the best way to resolve all of the past tax years - start with an amended 2023 return, then file 2024 and 2025?

[baldietax]

sounds like a lot going on; you mentioned "what amounts should be entered into the taxable and nontaxable conversions boxes for Roth IRA contributions in tax year 2023" but you said earlier you did backdoor Roth so just to be clear, think of Backdoor Roth as two separate transactions/steps - a non-deductible contribution to a Traditional IRA; and a conversion from Trad IRA to Roth IRA (not a contribution to Roth, or recharacterization)

Form 8606 will calculate the non-taxable and taxable amount of the Roth conversion, based on the basis you carried forward, the non-deductible contribution and the market value of your Trad IRAs as of 12/31/25.  All your Trad IRAs (any IRA not designated as a Roth) are considered one pool.

Converting 401k to Trad IRA with pre-tax money will result in more tax due from the backdoor Roth as the conversion is considered taken in a pro-rata money from both pre-tax and after-tax (basis/non-deductible contributions).  The remaining portion of the non-deductible contribution will carry over as basis for future years and is distributed over time until the IRA balance is $0.  Form 8606 performs this calculation, in a nutshell the non-taxable portion will be:

conversion amount * (carryover basis + non-deductible contribution) / (market value as of 12/31/year + conversion amount)

I ended up doing some examples here for someone with a similar pre-tax issue so this thread maybe helpful

https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-enter-the-non-taxable-amount-of-...

so you'll need to go back to 2023 and make sure all the info for your 1099-R and contributions are entered correctly, and Form 8606 will calculate the non-taxable and taxable amounts and the basis carry forward on Line 14 which carries to 2024 Form 8606 Line 2 and so forth.  I'd spin up a spreadsheet and do your own calculations to keep track of it all.

At this point you should probably do (or already did) an extension for 2025 as you'll need the right final carry over basis from 2024 for your Form 8606.  I don't think you have to wait to file 2025 as long as you have right carryover basis, but if you have an extension you may as well file everything in order 2023 / 2024 / 2025.

Hopefully you are using TT Desktop, when doing amendments be sure to first save a separate copy of the .tax file and PDF with all forms and worksheets from your original filed return, otherwise the amendment process just overwrites this.

Hope that helps point in the right direction - see here for the general steps in Turbotax for backdoor Roth though they changed verbiage for 2025 but the general premise is the same and just pay attention to the on-screen questions

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...