Backdoor roth

[mmdannunzio]

Can I contribute to an IRA just to do a backdoor Roth without triggering ratios since I have a sizable rollover IrA from previous jobs (it is all pre tax money)

[MarilynG1]

Yes, if you make a non-deductible contribution to an IRA, then a backdoor Roth conversion, this will trigger Form 8606 in your return.  You'll be asked about any IRA basis you have.  If you had no other non-deductible IRA contributions, your beginning basis would be $0.

Here's detailed instructions on How to Enter a Back-Door Roth Conversion, which is a two-step process.

@mmdannunzio 

[mmdannunzio]

Oh. Since all my other IRAS are pre tax, this won’t trigger the form.  Do I need to include this information (contribution and backdoor) with my tax filing 1040 or is it separate ?

[MaryK4]

You will follow the steps Marilyn provided to enter the backdoor IRA, and you may have the 1099-Rs for the rollover- if it was a direct rollover, you may not receive the 1099-R or it will be coded in Box 7 but if you got a check then added as a rollover, you will the 1099-R and will have to indicate in TurboTax that you rolled over.  @mmdannunzio 

[mmdannunzio]

I see. So whatever I do before April 15 gets reported on next years taxes. Meaning if I establish a new non deductible Ira then do backdoor, I report that on next years taxes ?

[ThomasM125]

No, you can do the backdoor IRA in 2025, before April 15 for this tax season, and have it reflected on your 2024 tax return.

[mmdannunzio]

I was thinking of doing 16k all at once.  8 for 2024 and 8 for 2025   I wouldn’t have any forms from broker to report anything 

[RobertB4444]

You can do that as long as the broker qualifies them as two separate transactions.  

You'll create a substitute 1099-R for this year to reflect the $8000 for 2024.  Then, when you receive the 1099R showing 16000 for 2025 you will change it to 8000 before you enter it into next year's taxes.

@mmdannunzio