Mega-backdoor Roth with TurboTax Online

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slalom
Posts: 343
Joined: Mon Dec 25, 2017 3:59 am

Mega-backdoor Roth with TurboTax Online

Post by slalom »

I’m explicitly asking for people to NOT reply with ‘buy the download TurboTax, it’s better’ - thank you in advance!

Next year for TY 2023 will be the first time I file taxes having to account for Mega-backdoor Roth. My company allows after-tax 401k contributions that get in-plan converted to an after-tax roth 401k bucket- it comes out of my paycheck in a separate line item than the pre-tax 401k.

I use TurboTax Online (the highest level one that allows LLC stuff)

Questions:

A) Can I file whatever is needed for mega backdoor roth in TT online?
B) If so, can someone point me to information on how to do this?

I personally am not finding much googling.. at least nothing very specific step by step like the whitecoatinvestor back door roth page that he updates every year..

Thanks!
mw1739
Posts: 1147
Joined: Mon Mar 21, 2011 5:44 pm

Re: Mega-backdoor Roth with TurboTax Online

Post by mw1739 »

Can’t offer a step by step since I use a CPA, but essentially the MBR results in a 1099 for a rollover. Any tax software, probably even the cheapest Turbo Tax should be able to handle it.
barnaby444
Posts: 245
Joined: Sat Apr 03, 2021 10:56 am

Re: Mega-backdoor Roth with TurboTax Online

Post by barnaby444 »

I did it for several years just by following the prompts. I think there are times in the process where the language presented seems to be assuming your “distributions” (actually in-plan conversions) are taxable, but as long as your 1099-r shows a taxable amount of zero it should be fine. I also just watch the refund amount tracker to make sure it doesn’t change after I enter the 1099-r form.
Topic Author
slalom
Posts: 343
Joined: Mon Dec 25, 2017 3:59 am

Re: Mega-backdoor Roth with TurboTax Online

Post by slalom »

barnaby444 wrote: Fri Jun 02, 2023 7:39 am I did it for several years just by following the prompts. I think there are times in the process where the language presented seems to be assuming your “distributions” (actually in-plan conversions) are taxable, but as long as your 1099-r shows a taxable amount of zero it should be fine. I also just watch the refund amount tracker to make sure it doesn’t change after I enter the 1099-r form.
The part where I feel like I'm going to get tripped up is simultaneously dealing with the 1099-R for a normal backdoor roth.. but I guess as long as the prompts are based on a single form and you just re-do the prompts for each form..
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anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Mega-backdoor Roth with TurboTax Online

Post by anon_investor »

slalom wrote: Thu Jul 27, 2023 1:43 am
barnaby444 wrote: Fri Jun 02, 2023 7:39 am I did it for several years just by following the prompts. I think there are times in the process where the language presented seems to be assuming your “distributions” (actually in-plan conversions) are taxable, but as long as your 1099-r shows a taxable amount of zero it should be fine. I also just watch the refund amount tracker to make sure it doesn’t change after I enter the 1099-r form.
The part where I feel like I'm going to get tripped up is simultaneously dealing with the 1099-R for a normal backdoor roth.. but I guess as long as the prompts are based on a single form and you just re-do the prompts for each form..
You will have 2 different 1099-R, one for your IRA and one for your 401k. You will have to enter both.
MangoManiac
Posts: 42
Joined: Mon Nov 07, 2016 8:15 am

Re: Mega-backdoor Roth with TurboTax Online

Post by MangoManiac »

Also, when you are done with your return TT typically runs a "check" for errors. I remember being prompted to confirm that the taxable amount on the 1099 is actually $0 (implying that I entered the $0 value incorrectly). So as long as you enter the correct taxable amount (e.g. $0), you'll be good to go.
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