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Backdoor Roth on ProSeries

Forum|Forum|3 years ago
March 13, 2023
3 replies
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TP made a 6K Backdoor Roth conversion (a non-deductible IRA contribution that is converted to a Roth IRA. I'm not sure I understand the entries required on ProSeries or if I'm doing it correctly.

TP Opened an IRA (no other IRAs) w/ 6K and converted to Roth IRA same day (closing the IRA).

1099R Dist Code 2 for 6K is marked Taxable amount not determined and total distribution. I entered 1099R and then at the bottom of the worksheet selected B5 (Full amount of distribution was converted to a Roth IRA.

The 6K is entered on 8606 Line 16 & is taxable.

The transaction increases tax by about 2K. Just want to know that I'm handling this correctly.

IMO, I'm not sure it's worth spending 2K in taxes to get 6K into a Roth

ProSeries Professional

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Best answer by Jim-from-Ohio

here is how I do it and it works great for me

1. Enter the traditional IRA contribution on the IRA worksheet

2. If then flows naturally to form 8606

3. Enter 1099-R Worksheet, make sure IRA box is checked

4. Scroll down to B-5, check that box that rolled over to Roth

The End

rbynaker

Level 13

Shooting from the hip but you need to enter the original $6K Traditional IRA contribution (which the software will determine is non-deductible, creating basis). Then you probably need to enter a $0 somewhere for FMV of IRAs at year-end to get all of the basis allocated to the Roth conversion.

T

TaxGuyBill

Level 15

A Rick said, ProSeries needs to know the Basis of the Traditional IRA. I think Rick's method of entering the Traditional IRA contribution works (and is probably the correct way to do it), but I also think there is a "Quickzoom" button on the 1099-R worksheet that you can enter Basis as well.

If there were not any remaining Traditional IRA balances at the end of the year, there should be $0 of tax due to the current year backdoor Roth.

Jim-from-Ohio

Answer

Intuit Community Champion

here is how I do it and it works great for me

1. Enter the traditional IRA contribution on the IRA worksheet

2. If then flows naturally to form 8606

3. Enter 1099-R Worksheet, make sure IRA box is checked

4. Scroll down to B-5, check that box that rolled over to Roth

The End

Skylane

Author

Intuit Community Champion

@Jim-from-Ohio I think you got it!

I was reticent to make an entry on IRA worksheet line 1 because it's supposed to be a non-deductible IRA contribution. But, (Intuit be praised) it does create an 8606.... and tax is generated on 1/2 the contribution,.as it should be. I guess there will be am 8606 in her future forever..

Thanks

If at first you don’t succeed…..find a workaround

rbynaker

Level 13

Why should there be tax on 1/2 of the contribution?

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