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Backdoor Roth IRA and Form 8606 Line 8

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  • Backdoor Roth IRA and Form 8606 Line 8

    I am a PGY-4 resident. Because I received a large signing bonus this year, my income exceeds Roth limits, so this is the first year I'm doing a backdoor Roth. I already made $3k in Roth contributions in March 2020, so I had to recharacterize those to traditional IRA. I also made a separate $3k traditional IRA contribution, bringing my total 2020 IRA contributions to $6k. I then did the Roth conversion and the total converted was $7355 ($1355 in gains). Obviously this happened because my March Roth contributions incurred significants gains. I understand that I will have to pay taxes on the gains, but I want to know how to correctly report it on Form 8606. Is $7355 the number I put on Line 8 of Form 8606? The line reads "Enter the net amount you converted from traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2020. Also enter this amount on line 16". Vanguard is my brokerage firm. Any advice is helpful. Thank you.

  • #2
    yes

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    • #3
      Along these lines, my wife switched jobs in 2020 and had about $3000 in her 401k which was transferred to a rollover IRA in our fidelity account. I did a Roth conversion on that in addition to the $6000 contribution (so converted $9000 total). Do I put $9000 on Line 8 of 8606? I only ask because 8606 says "traditional, SEP, and SIMPLE IRAs" all over the place. Wasn't sure if these former-401k-now-rollover-IRAs were included in that bucket. Thanks!

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