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I’m converting to Roth with some non-deductible contributions in 2025. Pro-rata rule should I use 12/31/24 balances or 12/31/25 ?

 
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3 Replies
dmertz
Level 15

I’m converting to Roth with some non-deductible contributions in 2025. Pro-rata rule should I use 12/31/24 balances or 12/31/25 ?

A Roth conversion performed in 2025 will be reportable on your 2025 tax return that you prepare next year and your 12/31/2025 balance in traditional IRAs will need to be used on the 2025 Form 8606.

I’m converting to Roth with some non-deductible contributions in 2025. Pro-rata rule should I use 12/31/24 balances or 12/31/25 ?

Thanks but the amount in my traditional IRA’s will be lower by the amount I move to Roth this month. Is that right?

dmertz
Level 15

I’m converting to Roth with some non-deductible contributions in 2025. Pro-rata rule should I use 12/31/24 balances or 12/31/25 ?

Correct.  Form 8606 sums the year-end balance with the distributions/conversions (other than QCDs, HFDs and distributions those rolled over to a traditional IRA) when figuring the taxable amount of distributions/conversions.

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