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8606 IRS Form Question

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  • 8606 IRS Form Question


    This is the first time I've done a Back Door Roth, BDR, and have a question about IRS Form 8606.

    1. I contributed $7k and converted the $7k in 12/2022.
    2. On 12/30/2022, I earned $2 in interest in my tIRA. So, on 12/31/2022, I had $2 in my tIRA acct, not $0.
    3. In 1/2023, I did another BDR for 2023, and contributed and converted $7.5k. I also converted the $2 interest into my 2023 BDR.
    4. I'm using turbo tax to fill out my 2022 taxes and IRS Form 8606.
    5. When I enter $2 on line 6 of IRS Form 8606, the value of my tIRA on 12/31/2022, turbo tax changes line 1 from $7k to $6,998.
    6. Is this a glitch with turbo tax? Do I just over ride turbo tax to show $7k on line 1? (When I change line 6 to $0, line 1 goes back to $7k)
    7. Has anyone else had this happen? If so, what did you do?
    8. I still have to fill out Part II of Form 8606, converted $7k in 2022. Correct?
    9. I will have to pay taxes on that $2.00 in 2023?


  • #2
    You will have to pay taxes on both $2 of earning, in 2 different years. Yes, you will still have to complete Part II of 8606. No comment on what TT does, just see that this is the ultimate result. Wouldn’t recommend you override, hopefully other TT users will chime in.

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    • #3
      I'm not a TT user either, but the key data point will be how your 1099R reads. Just enter it that way into TT. I suspect you will have a prorata problem but just report it and be done with it. the tax will be miniscule. It would of course have been best to empty the IRA, but not doing so happens often enough that WCI has an entire error category devoted to it. See Step #5 Error: How to FIX Backdoor Roth IRA Screw-ups | White Coat Investor