1099-R Question: Traditional IRA to Roth Conversion Taxes

If I already did the conversion last year but didn't file an 8606 for that tax year, can I still file one for this year or am I in trouble? Also, does the 8606 get filed every year I make non-deductible contributions or just when I do a conversion?

You should file Form 8606 for any tax year when you make non-deductible contributions to a traditional IRA, regardless of whether you do a conversion. This establishes your basis and creates a paper trail. If you missed filing it in previous years, you should file amended returns with Form 8606 included. While there's technically a penalty for not filing it ($50), the IRS often waives this if you can show you didn't owe additional tax. The bigger issue is ensuring you don't get taxed twice on money that should only be taxed once.

Does it actually work with IRA conversions specifically? I'm doing a backdoor Roth this year and I'm worried about messing up the paperwork. My tax situation is complicated because I also have an old 401k.

I've seen so many tax tools that claim to handle special situations but then fall apart with anything slightly complex. Can taxr.ai actually handle the pro-rata rule calculations if you have multiple IRAs with both pre-tax and post-tax contributions?

Yes, it specifically handles IRA conversions and backdoor Roth scenarios. It walked me through all the basis calculations and pro-rata rules when I uploaded my documents. It asked targeted questions about my conversion that my regular tax software didn't. It absolutely handles the pro-rata rule calculations across multiple IRAs. That's actually one of the areas where it excels. I had a mix of deductible and non-deductible contributions across two different IRAs, and it correctly calculated the taxable portion of my conversion while considering my entire IRA balance across all accounts.

Wait, how does this actually work? Doesn't everyone have to wait on hold with the IRS? I don't get how a third-party service can somehow get you to the front of the line.

I'm super skeptical. The IRS phone system is notoriously terrible. There's no way some service can magically get through when millions of people are trying. Sounds like you're just trying to promote something.

It doesn't put you at the front of the line - it basically waits on hold for you. Their system dials repeatedly to get into the queue (which is often the hardest part with IRS lines being busy), then it holds your place and calls you when an agent picks up. It's not skipping any lines, just handling the frustrating holding process. I was skeptical too, but after wasting entire afternoons on hold only to get disconnected, I was desperate. It worked exactly as described - I registered my question, their system called the IRS, and about 35 minutes later I got a call that an agent was on the line. Much better than the 3+ hours I spent getting nowhere on my own.

What kind of documentation should I keep? I have confirmation emails from my brokerage showing the contributions, and I have last year's tax returns. Is that enough?

Confirmation emails are a good start, but you really want your account statements showing the contributions. Keep your Form 5498s that show IRA contributions for each year - these are usually sent out in May for the previous tax year. Your tax returns are crucial too, especially if you filed Form 8606 with them. If you didn't file 8606 forms for those non-deductible contributions, you should file amended returns to include them. Without the 8606 forms establishing your basis, it becomes much harder to prove which portions were already taxed.

I used TurboTax last year for my backdoor Roth and it worked fine. The interview questions specifically asked about non-deductible contributions and IRA conversions. Just make sure you answer the questions about having a basis in your IRAs correctly. The one tricky part was making sure I entered the 1099-R information exactly as it appeared on the form.