All Retirement tax questions posts

Re: 2024 and 2025 Form 8606 line 2-Nondeductible contributions basis is $0

baldietax — Thu, 23 Apr 2026 01:09:42 GMT

ok yes looks like your 2024 8606 is incorrect as it reflected a Trad IRA contribution. you should just do an amendment to file a corrected 8606 - advice from experts here has been to file amendment with 1040-X to ensure it is processed even though should be no effect on your 1040.

2025 8606 looks right but make sure you enter it as the original Roth contribution then answer the recharacterization questions which will ask for the market value etc, and a recharacterization statement which will be included in your return, see guidance in comments here

https://ttlc.intuit.com/community/retirement/discussion/8606-roth-recharacterization-followed-by-backdoor/00/3804951

For your 2026 8606 you should end up with Line 8 Roth conversion = $14274 which will all work out to be non-taxable on Line 13, and Line 14 should show the 14500-14274=226 carry over basis which will be stuck until you have some future earnings or pre-tax money to apply it against.

Re: 2024 and 2025 Form 8606 line 2-Nondeductible contributions basis is $0

user17727448620 — Wed, 22 Apr 2026 19:43:36 GMT

All IRA Contributions I made are non-deductible - From after-tax dollars earned ONLY.

2024 Roth contribution $7k

2025 Recharacterization from Roth to Traditional on 3/11/2026 - $6,907.68 (Original contribution $7k - loss)

2026 Recharacterization from Roth to Traditional on 3/11/2026 - $6,866.66 (Original contribution $7k - loss)

Contribute $500 to a Traditional IRA 3/27/26 (To reach max limit $7,500 Traditional IRA for 2026)

Backdoor Roth IRA conversion of the full balance (around $14,274) of the Traditional IRA (2025 and 2026 contributions) on 4/12/26 - $0 balance on the Traditional IRA currently

Roth Conversion made in 2026, I will report it on the 2026 tax form when I get the 2026 Form 1099-R.

2024 Form 8606 - this would be wrong? All $7,000 was into Roth IRA only

Line 1 - $7,000

Line 3 - $7,000

Line 14 - $7,000

Would this 2025 Form 8606 be correct?

2025 Form 8606
Line 1 - $7,000

Line 3 - $7,000

Line 14 - $7,000

The 2026 Form 8606 would be more complicated due to the Backdoor Roth

Line 1 - $7,500

Line 2 - $7,000

Line 3 - $14,500

Unsure what line 4-25 would be?

Re: IRS is asking more information on my wife date of death and social security number.

SharonD007 — Wed, 22 Apr 2026 18:45:25 GMT

Can you please clarify what your question is?

IRS is asking more information on my wife date of death and social security number.

al-miranda — Wed, 22 Apr 2026 16:34:33 GMT

Re: Distributions in my CDN RRSP [reinvested]

MonikaK1 — Wed, 22 Apr 2026 15:29:57 GMT

If you are not a U.S. citizen, you are considered a nonresident of the United States for U.S. tax purposes unless you meet one of two tests. You are a resident of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1 – December 31). See this IRS webpage for more information.

According to the Canadian Tax Foundation, distributions reinvested in a Canadian Tax-Free Savings Account (TFSA) are fully taxable by the IRS for U.S. citizens or residents. The U.S. does not recognize the TFSA as tax-advantaged; it is treated as a taxable foreign trust, requiring annual reporting of all interest, dividends, and capital gains.

Re: Distributions in my CDN RRSP [reinvested]

user17766499932 — Wed, 22 Apr 2026 02:05:46 GMT

Hi Monika, thanks for your response, much appreciated.

I thought I was on the Canadian side. Noted, I'll check the link you forwarded.

I will go through the US Canada Tax Treaty and fetch the details. So, based on what I understand from your email, the distribution which is reinvested in a Canadian RRSP should not be taxed but the distribution reinvested in Canadian TFSA, should be taxed in USA by IRS?

Note: In the USA, I am considered a resident for tax purposes.

Could you please confirm.

Thanks,

Razi

Re: Distributions in my CDN RRSP [reinvested]

MonikaK1 — Tue, 21 Apr 2026 22:32:30 GMT

This conversation is appearing in the US user Community. If you are a user of the Canadian version of TurboTax, you may wish to access the Canadian Community and participate in those discussions.

If you are filing a US return, you can claim charitable deductions to US-based charities.

A Canadian citizen residing in the U.S. typically files Form 1040 (U.S. Individual Income Tax Return) as a tax resident to report worldwide income, or 1040-NR if a non-resident alien. They must also report foreign financial assets (FBAR) and may need to file a final Canadian departure return, potentially followed by non-resident tax returns if they still have Canadian income sources.

For U.S. Residents Reporting Canadian RRSPs:

Use the "Foreign Tax Credit" section to report RRSP income and claim credits for Canadian taxes paid.
Report RRSP withdrawals, dividends, and earnings under the "Retirement Plans" section.
It is crucial to use the appropriate exchange rates for the date of distribution.

The Canada-U.S. Tax Treaty (Article XVIII) treats RRSPs as tax-deferred accounts, meaning reinvested dividends are not taxed annually as they would be in a Canadian TFSA. You must properly declare the tax-deferred status of your RRSP on your U.S. tax return to maintain this advantage. While reinvested dividends are deferred, actual withdrawals from your RRSP are fully taxable as ordinary income in the U.S.

Some U.S. states (notably California) do not recognize the Canada-U.S. tax treaty and may tax the reinvested dividends annually, even if the federal government does not.

See this discussion on a related topic.

@user17766499932

Re: Pennie was billing me from Aug to Dec 2025I never used it. They finally cancelled it. Do I still have to claim it?

rjs — Tue, 21 Apr 2026 21:35:10 GMT

If you received a Form 1095-A you are required to report it, whether or not you used the insurance.

Re: I didn't have a turbo tax 5329 form in yr 2024. yr 2024 form 8606 didn't have line 14 filled in. Can I fix this in yr 2025?

baldietax — Tue, 21 Apr 2026 21:32:15 GMT

when you enter a non-deductible contribution or 1099-R with Roth conversion, in the following questions you will be asked if you tracked basis in prior years and you can provide the updated basis carryover for your 2025 Form 8606 Line 2.

you would then need to file an amended return for 2024 to fix your 2024 Form 8606 Line 14 to match.

Re: Pennie was billing me from Aug to Dec 2025 I never used it. They finally cancelled it. Do I s...

Vanessa A — Tue, 21 Apr 2026 21:07:34 GMT

Yes. If you had the coverage and received a premium tax credit for it, you are still responsible for reporting it and claiming it on your tax return even if you did not use it at all.

Pennie was billing me from Aug to Dec 2025 I never used it. They finally cancelled it. Do I still have to claim it?

cathyfend10 — Tue, 21 Apr 2026 21:00:11 GMT

Tell me if I have to claim Pennie insurance if I never used it

Re: Tax on Social Security

DoninGA — Tue, 21 Apr 2026 17:34:52 GMT

@sixer1127 After you completed entry of the SSA-1099 for the Social Security benefits received in 2025, there was a following screen asking you if you lived in any of the foreign countries listed. If you selected Yes or skipped over this screen, the TurboTax program would not have calculated any taxes on your Social Security benefits entered on the Form 1040 Line 6a. Resulting in a 0 being entered on Form 1040 Line 6b.

Re: Tax on Social Security

sixer1127 — Tue, 21 Apr 2026 17:32:34 GMT

This was my first return collecting social security. My wife is still employed. Our adjusted gross income was $251,876, which made 85% of my SS benefits taxable. TTX did not recognize this, and placed "0" in box 6b. Received a letter from the IRS that I know owed them $969, instead of the rebate that TTX calculated. I have used TTX for many years and trusted it fully. K now better now!

Re: I took out a loan on my 401k. I am actively repaying on the loan. Do I have to pay the additional 10% for early withdrawl?

Opus 17 — Tue, 21 Apr 2026 17:31:07 GMT

A loan is not a withdrawal and no part of the loan is taxable or subject to penalties, as long as the loan is in good standing.

If you stop making repayments (such as because you leave the company) the outstanding balance is treated as a distribution and is subject to tax and penalties at that time.

Re: I took out a loan on my 401k. I am actively repaying on the loan. Do I have to pay the additional 10% for early withdrawl?

VolvoGirl — Tue, 21 Apr 2026 17:31:06 GMT

Did you get a 1099R for it? If you got a 1099R then it was not a loan or you didn't pay it back and it is now taxable. What code is in box 7 on the 1099R?

I took out a loan on my 401k. I am actively repaying on the loan. Do I have to pay the additional 10% for early withdrawl?

daniellemkraus — Tue, 21 Apr 2026 17:23:28 GMT

Re: How do I include differences, like 401(k) contributions from my spouse's W-2 when filing MFS ...

MonikaK1 — Tue, 21 Apr 2026 15:52:05 GMT

When filing Married Filing Separately (MFS) in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA, WI), you would report 50% of your spouse’s 401(k) contributions and 50% of their wages on your tax return. You must file Form 8958 to allocate this community income.

TurboTax generates Form 8958 (Allocation of Tax Amounts) when you select "Married Filing Separately" in a community property state. Search for "8958" in TurboTax, select the "Jump to" link, and answer "Yes" to community property adjustments to trigger the necessary worksheet for dividing income and withholdings.

IRS Form 8958 is used by married couples or Registered Domestic Partners (RDPs) living in community property states who file separate federal income tax returns. It allocates community income, deductions, and withholding between both spouses (50/50 split), ensuring correct tax reporting. It is mandatory in these states.

When you file separately in a community property state, you must follow your state's definition of separate and community property. You would split your wages equally. Similarly, split withholding, deductions, and credits, as each spouse is only responsible for their 50% share (withholding is shown on Line 11 of Form 8958). Also, if you file Married Filing Separately, you must either both itemize or both take the standard deduction.

The IRS suggests married couples in community property states look at their tax situation under both joint and separate filing options to determine which version saves them the most. Filing a joint return may be less complex and qualify you for tax credits. Filing separately depends on your situation and how your itemized deductions stack up against the Standard Deduction.

When you live in a community property state and file separate returns, you each must report 50 percent of your spouse's income and half of income generated by community assets, plus all of your separate income. The IRS has an allocation worksheet to simplify your calculations in Publication 555 Community Property. You also have to decide who will claim dependent children.

You can use TurboTax Online to test different scenarios before deciding to file jointly or separately. Click here for more information. Once you decide, you can use either Online or Desktop to prepare the return(s).

Click here for tax tips for community property states.

See this tax tips article for more information about entering information on Form 8958.

Re: Social Security tax calculation

rjs — Tue, 21 Apr 2026 15:48:43 GMT

@sureshbk

You wrote: "Social Security will be taxes between 50% to 85%."

That is not correct. The percentage of your Social Security benefits that is taxable can be anywhere from 0% to 85%. The only absolutely certain way to calculate the taxable amount of your Social Security benefits is to use the IRS worksheets. Note that the calculator that you referenced mentions some situations that it does not handle.

However, if your Form 1040 or 1040-SR in TurboTax has zero on line 6b, the most likely explanation is that you made the error that DoninGA described above.

Re: Social Security tax calculation

DoninGA — Tue, 21 Apr 2026 14:19:22 GMT

@sureshbk After you completed entry of the SSA-1099 for the Social Security benefits received in 2025, there was a following screen asking you if you lived in any of the foreign countries listed. If you selected Yes or skipped over this screen, the TurboTax program would not have calculated any taxes on your Social Security benefits entered on the Form 1040 Line 6a. Resulting in a 0 being entered on Form 1040 Line 6b.

Re: Social Security tax calculation

sureshbk — Tue, 21 Apr 2026 13:54:02 GMT

https://thefinancebuff.com/social-security-taxable-calculator.html

Take a look at this calculator.

Social Security will be taxes between 50% to 85%. We cannot take that as 0 taxable income.

This is were the turbo tax failed to calculation properly.