Did it drive you crazy to report a backdoor Roth IRA using Turbotax?

[Anonymous]

For the first time, DH and I will exceed the income limits this year for buying Roth IRAs. I would like to do backdoor Roth IRA contributions, whereby we contribute to traditional IRAs and immediately roll them over into Roth IRAs. Tne problem is that we do our taxes without an accountant, using Turbotax. I have read that the only way to report backdoor Roth IRAs in Turbotax is difficult, non-intuitive, and involves many steps. I have found instructions online (endorsed by Turbotax) for how to do it, but still find many people complaining online about what a pain it is.

In the spirit of casting a wider net, I am seeking feedback from DCUM. Has anyone found it manageable (without an accounting degree, that is) to report a backdoor Roth IRA using Turbotax? Or did it make you tear your hair out?

Thanks!

[Anonymous]

Bump.

Anyone?

[Anonymous]

I had no trouble last year.

[Anonymous]

It's somewhat confusing IIRC because of the way it's set up but I wouldn't say its difficult.

[Anonymous]

First year we did it, it got screwed up and we got audited. Sucked. Our mistake, we paid the penalty but at least we now know how to do it correctly going forward.

[Anonymous]

The problem is you use Turbotax. Use an accountant.

[Anonymous]

Anonymous wrote:The problem is you use Turbotax. Use an accountant.

Not OP, but I've done this with Turbotax, and I love having the $1000 I didn't pay the accountant. I do use him in years when I can't figure something out, though.

[Anonymous]

Turbo Tax has a help support line. I've called it before, although not with respect to a backdoor Roth IRA.

[Anonymous]

There is nothing to report - it's not a taxable event . It's all post tax money, and you can't write it off.

Have you been doing it wrong?

[Anonymous]

Anonymous wrote:There is nothing to report - it's not a taxable event . It's all post tax money, and you can't write it off.

Have you been doing it wrong?

You certainly have to file form 8606. Have you been doing it wrong?

OP the finance buff blog has a step by step guide

[Anonymous]

Just be sure to Google the 'pro data rule,' if you have significant other retirement money it's hard to benefit from this path to after tax, tax sheltered savings.

[Anonymous]

Anonymous wrote:Just be sure to Google the 'pro data rule,' if you have significant other retirement money it's hard to benefit from this path to after tax, tax sheltered savings.

That's pro rata and it applies to other IRAs, but not other 401ks.

[Anonymous]

Except that it's not a taxable event, like I said.

You pay zero taxes for conversion, as it is with post tax dollars.

[Anonymous]

Anonymous wrote:Except that it's not a taxable event, like I said.

You pay zero taxes for conversion, as it is with post tax dollars.

Actually a Roth conversion is a taxable event, although whether you actually owe taxes will depend on your specific facts. I do a Roth conversion every year and some years I owe tax and some years I don't.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Except that it's not a taxable event, like I said.

You pay zero taxes for conversion, as it is with post tax dollars.

Actually a Roth conversion is a taxable event, although whether you actually owe taxes will depend on your specific facts. I do a Roth conversion every year and some years I owe tax and some years I don't.

Wrong.

If I put 5k into a traditional, and convert it inmediatwly, it isn't taxable.

You need a new accountant/financial advisor.