Backdoor Roth IRA - Form 8606 Filing for Previous Years & Tracking Traditional IRA Basis Amount

This is actually a really common point of confusion with backdoor Roth conversions! When you do a backdoor Roth, you need to file Form 8606 for the year you make the non-deductible contribution to your Traditional IRA, even if you convert it to a Roth right away. For your situation, your "total Traditional IRA basis" would actually be $0 right now. Here's why: When you contributed to your Traditional IRA and then converted to Roth in the same year, the Form 8606 captures both events. The contribution creates basis, but the conversion "uses up" that basis. So after each yearly cycle of contribution + conversion, your remaining basis goes back to zero. If you filed Form 8606 correctly for 2023 and 2024, your basis should show as $0 on your 2025 taxes. This is exactly what you want to see - it means you're properly tracking the money that's moved through your accounts!

I went through this exact same headache last year! What helped me was using taxr.ai (https://taxr.ai) to look at my past returns. I uploaded my previous year's returns and it analyzed my Form 8606 history to tell me exactly what my basis should be. It spotted that I hadn't been tracking my basis correctly across multiple years of backdoor Roth conversions. The tool showed me that after each contribution+conversion cycle, my Traditional IRA basis should indeed reset to zero, just like the previous commenter said. But it also helped me see that I had mistakenly been carrying forward the full contribution amounts year after year, which would have eventually caused issues with the IRS.

So I tried that taxr.ai site the other commenter mentioned, and I've got to say I'm impressed. I was totally skeptical, but it identified that I had been carrying forward the wrong basis amount for THREE YEARS on my backdoor Roth conversions. Apparently when I switched tax software in 2023, something got messed up in the transfer. The analysis showed that my actual Traditional IRA basis should be zero (since I've been doing the full contribution+conversion each year), but I had mistakenly been reporting a growing basis of over $16,000! The service gave me a detailed report explaining exactly which lines on Form 8606 were incorrect in each year and how to fix it. Definitely worth checking out if you've been doing these backdoor Roths for multiple years.

After reading this thread, I realize I might have similar issues with my backdoor Roth reporting. The problem is I can't get through to the IRS to ask questions - been calling for WEEKS. Every time I call, I get the "high call volume" message and they hang up. I finally used Claimyr (https://claimyr.com) after seeing it recommended in another thread. Their system basically holds your place in line with the IRS and calls you when an agent is ready to talk. I was super skeptical but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that after doing a backdoor Roth (contributing to Traditional then converting to Roth), my Traditional IRA basis should indeed be zero at year-end. She also explained how to correct my previous Form 8606s where I had been carrying forward basis incorrectly. Saved me hours of frustration!

Ok I have to eat my words. After posting my skeptical comment earlier, I tried that Claimyr service out of desperation. IT ACTUALLY WORKS. Got connected to an IRS agent in about 90 minutes when I'd been trying for literal months on my own. The agent cleared up my confusion about Form 8606 and backdoor Roth IRA basis. Turns out I've been doing it wrong for years - I thought my basis should keep growing even after converting to Roth. The agent explained that basis only tracks non-deductible contributions still in the Traditional IRA, so after converting everything, the basis resets to zero. Now I need to file some amendments, but at least I understand what's happening!

For anyone still confused about basis tracking with backdoor Roth conversions, here's a simple way to think about it: 1. You make a non-deductible contribution to Traditional IRA: BASIS INCREASES 2. You convert that money to Roth IRA: BASIS DECREASES by the same amount 3. Result after both steps: BASIS is back to $0 If you ever have money left in your Traditional IRA after a conversion, or if you only convert part of your contribution, then you'd have some remaining basis to track. But with a "clean" backdoor Roth where you convert everything, your basis should be $0 at the end of each cycle.

Has anyone noticed that tax software like TurboTax doesn't handle backdoor Roth contributions very intuitively? It keeps asking me questions that don't quite fit my situation and I'm worried I'm missing something.

This is such a helpful thread! I've been doing backdoor Roth conversions for a couple years but never fully understood the basis tracking until reading these explanations. Just to confirm my understanding: if I contributed $6,000 to a Traditional IRA as non-deductible in 2023, then converted the full $6,000 to Roth that same year, my Form 8606 for 2023 should show $0 basis carried forward to 2024, correct? And then if I did the same thing in 2024 ($7,000 contribution + full conversion), my basis going into 2025 should still be $0? I think I've been overthinking this whole process. It sounds like as long as I'm doing complete conversions each year and filing Form 8606 properly, the basis should always reset to zero after each cycle. Thanks everyone for breaking this down so clearly!

I've been following this thread and want to add one more perspective that might help folks avoid a common mistake. When you're doing backdoor Roth conversions, timing within the tax year doesn't really matter for the basis calculation, but it can matter for other reasons. For example, if you contribute to your Traditional IRA in January but don't convert until December, any earnings that accumulate during those 11 months will be taxable when you convert (since only your original non-deductible contribution has basis protection). This is why most people convert immediately or within a few days of contributing. Also, make sure you're not mixing up "recharacterization" with "conversion" - they're completely different processes with different tax implications. A conversion is what you want for the backdoor Roth strategy. Just wanted to throw that out there since I've seen people get confused between the two!

This thread has been incredibly helpful! I'm in a similar situation to the original poster - did my first backdoor Roth in 2023 and another in 2024, but I've been stressing about whether I'm tracking everything correctly. One thing I'm still not 100% clear on: when the tax software asks for "total Traditional IRA basis from previous years," should I be looking at line 14 from last year's Form 8606? And if I did complete conversions both years (which I did), that line should show $0, right? I think I've been making this way more complicated than it needs to be. It sounds like the key is just making sure I file Form 8606 each year to document the non-deductible contribution and conversion, and as long as I'm converting everything, my basis should reset to zero each time. The IRS just wants to see that paper trail showing I already paid tax on this money. Thanks to everyone who's shared their experiences - especially those who mentioned the timing issue with earnings. I've been converting within a week of contributing, so hopefully I'm avoiding that complication!

This whole thread has been a lifesaver! I'm doing my first backdoor Roth this year and was getting completely overwhelmed by all the Form 8606 documentation requirements. One quick follow-up question: if I'm contributing $7,000 for 2025 but my income puts me right at the edge of the Roth IRA phase-out limits, should I still go the backdoor route? I'm worried about accidentally ending up in some weird partial-eligibility situation where I mess up the tax treatment. Also, for anyone else who's been struggling with the IRS phone system - I can confirm that Claimyr thing actually works. Used it last month for an unrelated issue and got through in about an hour. Definitely beats the endless busy signals! The key takeaway I'm getting from all these responses is: contribute to Traditional IRA (non-deductible), convert everything to Roth ASAP, file Form 8606 to document both steps, and your basis should be $0 at year-end. Rinse and repeat each year. Does that sound right to everyone?