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Backdoor Roth - yet another logistics question

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  • Backdoor Roth - yet another logistics question

    Sorry for the millionth backdoor question, but before I finalize what I am doing I wanted to check with the wisdom of the crowds for any red flags.

    I'm doing a 2016 backdoor for my wife.  Unfortunately I did not do this in 2016. We moved $5500 into the account in February 2017 for the tax year 2016.  I am planning to add another $5500 later in 2017 for tax year 2017, and then complete the conversion for the whole amount $11000 by 12/31/17 so that I can report it on my 2017 taxes.  If I understand correctly, none of this needs to be reported on my 2016 tax return, and it will all go on the 2017 return since it was done in the calendar year 2017.  Does this sound like correct protocol?

    I'm planning ahead for myself a little better this year. I have a traditional IRA that I am moving into my 401k to avoid pro-rata, so that I can do a backdoor for 2017 within the calendar year and make my reporting basis much easier.

    Thanks for the advice!

  • #2
    You're close to correct.

    • You will report the nondeductible TIRA contributions that you made for 2016 on page 1 of Form 8606, filed along with your 1040.

    • In 2017, you will report the 2017 n.d. TIRA contribution on page 1 of 8606 and then the conversion of both contributions (totalling $11k + any earnings) on page 2 of Form 8606.


    From reading your post, I presume that you are not aware that you can also perform step 1 of the backdoor Roth for yourself for 2016 - you do not have to wait until 2017. Go ahead and contribute $5,500 to a n.d. TIRA for yourself before 4/18/17 and designate it for 2016. Step 1 has nothing to do with the pro-rata tax calculation. As long as you roll your pre-tax TIRA into your 401k prior to 12/31/17 (the only day that matters), there will be no tax effect for you on the 2017 conversion (step 2).

    This article may help: Explaining Backdoor Roth IRAs.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      Thank you so much for the help, and your website article was awesome. After hours of research, I finally feel like I understand the logistics behind the "maneuver"!  Much appreciated.

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