Backdoor IRA 2023/2024 contribution - how to file form 8606 correctly?

Wait but what if the conversions for both years happened at the same time? Does that change anything? I did something similar where I contributed for 2023 and 2024 on the same day and then converted everything a week later.

The timing of the conversion doesn't change the reporting requirements. Even if you converted both years' contributions at the same time, you still need to report the contributions on separate Forms 8606 for their respective tax years. For the conversions, you report them on Form 8606 for the year in which they actually occurred. So if you did both conversions in 2024, both would be reported on your 2024 Form 8606, but you'd still need to report the 2023 contribution on a 2023 Form 8606 (requiring an amended return in your case).

How does taxr.ai handle the basis tracking between years? That's what confuses me the most with Form 8606. Like if you have existing pre-tax IRA money, does it figure out the pro-rata calculations automatically?

I'm skeptical about these tax tools. Does it actually fill out the forms for you or just tell you what to do? And how does it know the right way to report backdoor Roths since the IRS guidance is kinda vague?

It absolutely handles basis tracking across years - that's what impressed me most. You upload your prior year tax docs and IRA statements, and it keeps track of your non-deductible basis. It even warned me about the pro-rata rule since I had some old traditional IRA funds. For filling out forms, it actually generates a completed PDF of Form 8606 that you can review, edit if needed, and then either print or import into your tax software. The backdoor Roth guidance is based on official IRS publications and tax court precedents, so it's pretty solid.

How does this actually work? I've been calling the IRS for 3 weeks about my backdoor Roth issue and keep hitting the "call volume too high" message.

This sounds like BS honestly. Nobody gets through to the IRS in 15 minutes. I've been trying for months about my Form 8606 issue. Either you got incredibly lucky or this is some kind of scam.

It works by essentially managing the call process for you. They use technology to navigate the IRS phone system and secure your place in line. When they reach an agent, they call you and connect you directly - no need to stay on hold for hours. It's definitely not BS or luck. The system is specifically designed to optimize call timing and navigation through the IRS phone tree. They know the best times to call and which options to select for different tax issues. I was skeptical too until I tried it and got connected in about 15 minutes after weeks of failed attempts.

What exactly is the pro-rata rule? I've been doing backdoor Roth for 2 years but have an old traditional IRA with about $30k in it. Should I be worried?

Yes, you should definitely be concerned. The pro-rata rule means you can't just convert your non-deductible contributions tax-free if you have other pre-tax IRA money. The IRS looks at all your IRA accounts (traditional, SEP, SIMPLE) as one big pot when you do a conversion. The taxable portion is calculated based on the ratio of pre-tax money to the total IRA balance. So if 80% of your total IRA money is pre-tax, then 80% of any conversion will be taxable regardless of which specific dollars you're converting.

TurboTax actually handles this pretty well but it's not obvious. You need to go to the IRA contributions section and make sure you select "nondeductible contributions." It'll then walk you through Form 8606. Just make sure you indicate which tax year the contribution was for. For the conversion, that goes in a separate section under "IRA distributions.