Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done right

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Bogle-007
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Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done right

Post by Bogle-007 »

I just did my taxes with both Turbo Taxes and Credit Karma. The questions they ask you for figuring in the Backdoor Roth are frustratingly confusing. To me it's actually more straightforward to do the actual 8606 form from the IRS. I slogged through it and I think I got it right...

Thankfully, CK will show you a PDF of your IRS tax forms before you submit.

Question: If the Form 8606 looks right, and the numbers from Form 8606 box 16 and 18 correspond to Form 1040's line 4a and 4b, respectively, are we good to go?
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Duckie
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by Duckie »

NewbieBogle007 wrote: Sat May 15, 2021 7:36 pm If the Form 8606 looks right, and the numbers from Form 8606 box 16 and 18 correspond to Form 1040's line 4a and 4b, respectively, are we good to go?
Probably. The lines which matter the most are 14, 16, 17, and 18.
e5116
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by e5116 »

NewbieBogle007 wrote: Sat May 15, 2021 7:36 pm I just did my taxes with both Turbo Taxes and Credit Karma. The questions they ask you for figuring in the Backdoor Roth are frustratingly confusing. To me it's actually more straightforward to do the actual 8606 form from the IRS. I slogged through it and I think I got it right...

Thankfully, CK will show you a PDF of your IRS tax forms before you submit.

Question: If the Form 8606 looks right, and the numbers from Form 8606 box 16 and 18 correspond to Form 1040's line 4a and 4b, respectively, are we good to go?
I always record my refund/amount owed before I do it, then do all the Backdoor questions/fill outs, and if the amount doesn't change, I feel confident I did it correctly...
humblecoder
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by humblecoder »

This year was my first Backdoor Roth. I didn't have any issue reporting it in TurboTax or H&R Block software. If you can elaborate on what specific question(s) you found confusing, maybe somebody can help. That way, it will go smoother for you next year.
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sunny_socal
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by sunny_socal »

Skip the software and just follow this guide:
https://www.physicianonfire.com/backdoor/

Then follow this guide for filling out your own 8606 and send in a paper copy. Easy.
https://www.merriman.com/wealth-enhance ... our-taxes/
livesoft
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by livesoft »

I think the problem is the use of the word "Backdoor" which confuses taxpayers and non-taxpayers. One cannot search tax prep software nor IRS publication for the word Backdoor and get a 'hit', though google.com is clever and knows you want IRA info.

You are making a nondeductible traditional IRA contribution followed by a Roth conversion. I find that it is simple once you know that. I'll bet that some taxpayers do not know they are making a Roth conversion when they think they are contributing to a Backdoor Roth.
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ScaledWheel
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by ScaledWheel »

sunny_socal wrote: Mon May 17, 2021 6:34 am Skip the software and just follow this guide:
https://www.physicianonfire.com/backdoor/

Then follow this guide for filling out your own 8606 and send in a paper copy. Easy.
https://www.merriman.com/wealth-enhance ... our-taxes/
I think this may be the way I go next year. Did my first backdoor Roth last year and the process to do it in TurboTax was so frustrating. Is there any indication that sending in these types of paper forms separate from your e-filing increases the risk of audit?
mceagle555
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by mceagle555 »

This is the best guide I've found. He also updates it every year (for the last 3 years) with new screenshots.

https://thefinancebuff.com/how-to-repor ... botax.html

Highly recommend.
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Bogle-007
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Joined: Mon Jun 20, 2016 5:49 pm

Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by Bogle-007 »

Thanks for all the input, guys. Very helpful stuff.
Chuckles960
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by Chuckles960 »

NewbieBogle007 wrote: Sat May 15, 2021 7:36 pm I just did my taxes with both Turbo Taxes and Credit Karma...

Thankfully, CK will show you a PDF of your IRS tax forms before you submit.
Turbotax (I'm guessing that's what you mean by "Turbo Taxes") will show you the PDFs also. It just doesn't make it easy to figure out how to do so. You do have to pay first.
Topic Author
Bogle-007
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Re: Backdoor Roth: The tax programs are more confusing than the actual Form8606! Lets discuss how to confirm it's done r

Post by Bogle-007 »

Chuckles960 wrote: Wed Jun 02, 2021 4:37 pm
NewbieBogle007 wrote: Sat May 15, 2021 7:36 pm I just did my taxes with both Turbo Taxes and Credit Karma...

Thankfully, CK will show you a PDF of your IRS tax forms before you submit.
Turbotax (I'm guessing that's what you mean by "Turbo Taxes") will show you the PDFs also. It just doesn't make it easy to figure out how to do so. You do have to pay first.
Yes, that’s right... and I didn’t want to pay first.
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