Roth backdoor conversion taxable amount being ignored

[665011]

I contributed $7,000 to a traditional IRA and then converted it to a Roth. However, I still had about $54 of pre-tax money remaining in the IRA as of Dec 31, 2025, which I reported in TurboTax.

TurboTax shows the $54 on the worksheet, but it doesn’t appear on Form 8606 or 1040. Does anyone know why TurboTax is ignoring it, and what I should do to fix this?

[baldietax]

what IS being reported on your 8606 and 1040?  Are the contribution and conversion otherwise reported?

if you have asterisks on the 8606 then it's using a different worksheet to do the calculation but the outcome should be same

[665011]

It does have asterisks on 8606 line 13 and 15c, and there is a worksheet "Taxable IRA Distribution Worksheet" where it adds my 2025 7000 contribution to IRA and 2024 7000 to $14,000 and divided by $7045. Since it is more than 1, it keeps it as 1 and then times $7000 distribution to form the nontaxable amount as $7000.  I asked AI, it says this is some kind of aggregate rule. I am still very confused....

[baldietax · Accepted solution]

it sounds like you have a carryover basis of $7000 from your 2024 IRA so it thinks you have a $14000 basis for a $7000 conversion and $45 MV so all the $7000 is determined to be tax free.

what happened in 2024 - check your 8606 from last year, Line 14 is the basis carried over to 2025.

either you did a backdoor Roth in 2024 but didn't file the conversion properly so the basis is left over; or you backdated contributions to the prior years in which case this outcome sounds correct if you backdated 2024 contribution and converted it in 2025 (the 1099-R you have to report); and then backdated 2025 contribution now and the conversion of that will be reported in 2026 (you don't have the 1099-R for it yet) so you have a $7000 basis carryover to 2026.

[665011]

You are right! It makes sense now, yes I backdated both 2024 and 2025, so the $7000 of 2025 is not yet deposit, but is considered as basis, so i guess any residue less than 7000 on Dec 31 2025 is considered tax free.