Tell Us the Value of Your Traditional IRA

[Ats1]

When TurboTax asks for this value, it says to refer to the 5498 form for the fair market value as of 12/31/24.

If I made a Traditional IRA contribution in April 2025 for tax year 2024 (and shortly thereafter converted this contribution to my Roth IRA), does this amount get added to the total shown on the 5498 form? Or should it just be the amount shown on the form?

[dmertz]

Do not add to the FMV shown on the Form 5498.  Just enter the amount shown on the From 5498.

[baldietax]

is this in the retirement section for Form 8606 - this form is very specific about dates and handling the Q1 contributions, so take the instructions very literally when it asks for your balance as of 12/31/24 it means as of that date.  Form 5498 is usually not mailed until May but the instructions for Form 8606 refers to using statements provided in January i.e. your brokerage statements for 12/31/24.  Form 5498 should also be the balance as of 12/31 and should be same as your statement.  It just happens you're filing with extension so you do have the 5498.

Roth conversions are taxed by the calendar year in which they are done.  If you made a non-deductible contribution to your Trad IRA in April 2025 for 2024, that counts towards your 2024 limits and becomes part of your final basis on Form 8606 for 2024, carried over to 2025.  The Roth conversion you then immediately did of that contribution in April 2025 applies to the 2025 tax year not 2024 (along with your 2025 backdoor if you do it during the calendar year) - you won't have received the 1099-R for it yet.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...

https://www.irs.gov/pub/irs-pdf/i8606.pdf

Line 6

Enter the total value of all your traditional, traditional SEP,

and traditional SIMPLE IRAs as of December 31, 2024,

plus any outstanding rollovers. A statement should be sent

to you by January 31, 2025

[Ats1]

@baldietax @dmertz thank you both for the quick replies; however, you seem to have conflicting answers if I’m understanding this correctly.

@baldietax are you saying that I should be adding the Traditional IRA contribution made in 2025 for tax year 2024 to this 5498 FMV total?

[Opus 17]

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@Ats1 wrote:

@baldietax @dmertz thank you both for the quick replies; however, you seem to have conflicting answers if I’m understanding this correctly.

@baldietax are you saying that I should be adding the Traditional IRA contribution made in 2025 for tax year 2024 to this 5498 FMV total?

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Both answers are the same, see where @baldietax  wrote "take the instructions very literally when it asks for your balance as of 12/31/24 it means as of that date."

Where are you in the instructions and why are you asking?

For purposes of preparing form 8606 for non-deductible contributions or conversions involving non-deductible contributions,  the form wants your balance at the close of business on 12/31/24, regardless of later, backdated contributions.  Later backdated contributions are handled on a different place on that form.

If you are somewhere else in the program asking about a different form, let us know what you are working on and we can double-check and confirm the answer if you like.

[baldietax]

we're saying the same thing for that question - you report your balance as of 12/31, do not adjust for any contribution made for 2024 after 12/31.

This 12/31/24 balance is used to calculate the tax on any Roth conversion you did in calendar year 2024; if you have a balance (across all your IRAs if your multiple accounts) in excess of the basis from the "after tax" non-deductible contributions (due to earnings in the IRA or a 401k rollover etc), then the Roth conversion will consist of a pro-rata amount of pre-tax and after-tax funds, and taxed accordingly.  The general premise of the backdoor Roth being entirely non-taxable is you do not have any balance in your Trad IRA, you contribute, convert and it goes back to zero.

Separately, you would report that you made a contribution in 2025 for 2024, which will update your basis in the IRA for the 2024 tax year which will carry forward to the tax calculation in 2025.  This will be reflected in lines 1, 4 and 14 of Form 8606 for 2024, and carries forward to line 2 of Form 8606 for 2025.

If you are using desktop use forms mode to see how Form 8606 is being filled in; with TT online I think you can see it when you export the PDF of your return.

[Ats1]

@Opus 17 @baldietax -- thank you both for your quick responses, they've been incredibly helpful so far. 

To answer your question, I'm in the Deductions & Credits section, then Traditional and Roth IRA Contributions (Form 5498) sub-section. I'm asking because I'm trying to determine how this gets reported correctly for the pro-rata rule. It was the next line that reads "Include any IRA contributions [name] made or will make in 2025 for 2024" that caused me confusion.

To be crystal clear, I received three Form 5498 documents (one for Traditional, one for Roth, and one for SEP).

The SEP IRA Form 5498 gave me a FMV, which is what I entered on this screen.

The Traditional IRA Form 5498 shows the IRA contribution that was made in April 2025 for 2024 (Line 1), but then the FMV (Line 5) is blank, so I assume this is $0 and the grand total on the screen I input is solely the FMV amount from the SEP IRA Form 5498, correct? 

Unrelated to my question but helpful to understand, the same 2024 Traditional IRA Form 5498 mentioned above also includes a "Recharacterized contribution (Line 4)" amount, which is for a Roth Contribution made in 2023 (for tax year 2023) that I recharacterized in 2024. How do I make sure this is reported correctly?

[dmertz]

"It was the next line that reads "Include any IRA contributions [name] made or will make in 2025 for 2024" that caused me confusion."

This is in regard to entering your contributions, not to entering the FMV.

"the FMV (Line 5) is blank"

This is presumably indicating that you had no money in this traditional IRA on 12/31/2024. A SEP IRA is a type of traditional IRA, so it's value must be included in the total FMV (and in this case would be the total amount to be entered).

The recharacterized contribution reported on the code-R 2024 Form 1099-R should have been reflected on your 2023 tax return.  You can enter this form into 2024 TurboTax, but 2024 TurboTax will ignore it other than to remind you that it should have been reflected on your 2023 tax return, with the result being a traditional IRA contribution, presumably nondeductible reported on your 2023 Form 8606.