Backdoor Roth IRA/ Correct 1040 But Wrong 8606
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misstree797
Returning Member

Backdoor Roth IRA/ Correct 1040 But Wrong 8606

I am preparing my tax return for 2020 and failed several times in Form 8606 even following all the guidance I found on Turbo tax.  Here is the link I used https://ttlc.intuit.com/community/entering-importing/help/how-do-i-enter-a-backdoor-roth-ira-convers... 

My situation is quiet simple. 2020 is the first time I did backdoor IRA. I created my Traditional IRA account, put in $6000 and converted all of the money to my Roth IRA. All the actions finished before Dec. 31st 2020. However I got a correct 1040 and a wrong 8606.

On my form 8606, box 8 ( the net amount you converted from traditional IRA to Roth IRA in 2020) is Zero, which is supposed to be $6000. This mistake does not affect Turbo tax generating correct calculation on my1040. But the Form 8606, Part I is totally wrong. 

Does anyone have the same problem?

2 Replies
ThomasM125
Employee Tax Expert

Backdoor Roth IRA/ Correct 1040 But Wrong 8606

Although the instructions don't specify this, I believe line 8 is for a situation where you made a taxable ROTH IRA conversion, as opposed to the non-taxable conversion you have with a backdoor IRA. Either way, you multiply box 7 or 8 by the same factor on line 10 so that gives you the correct result on line 13 and the rest of the form.

 

TurboTax sometimes interprets the instructions a little differently than a literal interpretation would indicate. 

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misstree797
Returning Member

Backdoor Roth IRA/ Correct 1040 But Wrong 8606

Both Line 7 and Line 8 are Zero/blank on my 8606. And this makes Line 9 is Zero ( which is the sum of 7and 8).  

Line10 requires dividing Line 5 by Line 9. Since my Line 9 is Zero,  Line 10 is Zero now (which is supposed to be 1). 

Line 11 and Line 12 are Zero now because they are the result of multiplying Line7/8 to Line 10.

Line 13 is supposed to be Zero since it's the sum of line 11 and line 12. However, turbo tax gives a $6000 (which is the correct number in actual) with a star mark. The star mark says "from Taxable IRA Distribution Worksheet (per IRS Pub.590-b)

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