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Backdoor Roth - tiny leftover basis across years + possibly wrong 8606 (need advice before 2025 filing)

Trying to clean up my IRA basis before filing 2025 taxes. I think I messed up my 2024 Form 8606.

2023

  • Contribution (nondeductible): $6,500

  • Conversion (1099-R): $6,500

  • End of year Trad IRA balance (5498): ~$4.12

2024

  • Starting basis: ~$4

  • Contribution (nondeductible): $7,000

  • Conversion (1099-R): $7,000

  • End of year Trad IRA balance (5498): ~$5.31

What I now realize

  • I only converted the contribution each year

  • Small leftover (~$4 → ~$5) stayed in the Traditional IRA and carried forward

The problem

My already-filed 2024 Form 8606 shows:

  • Line 13 (non-taxable conversion): $7,004

  • Line 14 (remaining basis): $7,004

That doesn’t match reality:

  • 1099-R shows only $7,000 converted

  • There was still ~$5 left in the Trad IRA at year end

My understanding (sanity check)

Correct 2024 should probably be:

  • Line 13 (non-taxable conversion): $7,000

  • Line 14 (remaining basis): ~$4–5

Questions

I should amend my 2024 8606 form, right? Any impact on this when filing 2025?

 

https://imgur.com/a/6NQMzQA -- Posted my 8606, 1099R and 5498 for both the years.
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4 Replies

Backdoor Roth - tiny leftover basis across years + possibly wrong 8606 (need advice before 2025 filing)

Yes 2024 8606 looks wrong, seems the conversion was missing (line 13 in your screenshot shows $0 not $7004) it just shows a contribution.  I think your understanding of what it should look like is correct, similar to 2023.  you'll need to file an amended return for that, it may affect your 1040 as well as 8606 if the 1099-R was not reported.

 

Note on your 2023 Form 8606 you see the asterisks this indicates the calculation is happening on a separate IRA worksheet which should be in your PDF with all forms and worksheets (or in Forms mode if using desktop).

 

For 2025 you'll need to make sure you have the right basis carryover from your revised 2024 8606 Line 14 to 2025 8606 Line 2.  After you enter the contribution or 1099-R you will be asked to confirm the basis tracked for 2024 or before and can adjust it there.

 

If you still have a residual balance/basis I would suggest converting the entire balance and clear it out to $0 this year and going forward.  I assume you're picking up some interest inbetween settlement of the contribution and conversion which can happen at brokers like Vanguard etc.

 

see this thread on suggestions how to file - technically you could wait and do it in sequence but as suggested by @dmertz you probably don't need to wait to amend 2024 to file 2025 - as long as you are certain of the basis carryover for 2025 so you don't have to amend 2025 later.

https://ttlc.intuit.com/community/taxes/discussion/what-s-the-best-sequence-timing/00/3871012

dmertz
Level 15

Backdoor Roth - tiny leftover basis across years + possibly wrong 8606 (need advice before 2025 filing)

What is the amount in box 1 of each of the Forms 1099-R and what is the year of the form?

Backdoor Roth - tiny leftover basis across years + possibly wrong 8606 (need advice before 2025 filing)

2023 - 1099R - Box 1 amount = $6,500

2024 - 1099R - Box 1 amount = $7,000

dmertz
Level 15

Backdoor Roth - tiny leftover basis across years + possibly wrong 8606 (need advice before 2025 filing)

Depending on how TurboTax rounds, your 2023 Form 8606 should have shown something like:

 

Line 1 = $6,500

Line 14 = $6

Line 16 = $6,500

Line 17 = $6,494

Line 18 = $6

 

and your 2024 Form 8606 should have shown something like:

 

Line 1 = $7,000

Line 2 = $6

Line 14 = $6

Line 16 = $7,000

Line 17 = $7,000

Line 18 = $0

 

The $6 on line 14 of your 2024 Form 8606 carries forward to line 2 of the next From 8606 you are required to file.  If you made a nondeductible traditional IRA contribution for 2025 or you did a Roth conversion in 2025, that would be your 2025 Form 8606.

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