topic Re: Back door Roth IRA catch up in Retirement tax questions

Back door Roth IRA catch up

jennn1217 — Sat, 23 Jan 2021 09:30:42 GMT

Hi! Just recently learned about back door Roth IRAs and looking to contribute to both FY 2020 and FY 2021?

How and when would I report this for taxes if doubling up within the same calendar year, but they are allocated to separate FY?

Planning to do same year moving forward to keep it simple.

Re: Back door Roth IRA catch up

dmertz — Sat, 23 Jan 2021 14:40:34 GMT

A backdoor Roth is nothing more than a traditional IRA contribution (or contributions) followed by a Roth conversion. Each of these transactions is entered separately into TurboTax.

A traditional IRA contribution for 2020 is reportable on your 2020 tax return. If it's deductible it will appear on your 2020 Schedule 1 line 19. If it's non-deductible it will appear on Part I of your 2020 Form 8606. Nothing else regarding these transactions will appear on your 2020 tax return.

A traditional IRA contribution for 2021 is reportable on your 2021 tax return. If it's deductible it will appear on your 2021 Schedule 1 line 19. If it's non-deductible it will appear on Part I of your 2021 Form 8606 along with the amount carried forward from line 14 of your 2020 Form 8606.

A Roth conversion performed in 2021 will be reported on your 2021 tax return. The taxable amount of the conversion will be calculated on Part I of 2021 Form 8606 (or using Worksheet 1-1 from IRS Pub 590-B) and the conversion itself will be reported on Part II of the 2021 Form 8606.

Re: Back door Roth IRA catch up

jennn1217 — Sat, 23 Jan 2021 17:18:07 GMT

@dmertz Thanks! Would the Roth conversion for both 2020 and 2021 be reported in my 2021 taxes? Or would I need to later amend my 2020 taxes to account for the conversion?

Re: Back door Roth IRA catch up

dmertz — Sat, 23 Jan 2021 19:08:30 GMT

Roth conversion are performed in a particular year, not for a particular year. Any Roth conversion performed in 2021 is reportable on your 2021 tax return (2021 Form 8606).