Backdoor Roth IRA issues - how to report conversions correctly on taxes?

I just found out about the Backdoor Roth IRA option for high income earners last year, and I'm kicking myself for not knowing sooner! I managed to do contributions for both 2023 and 2024 in early 2024 (before the 2023 deadline). I contributed $6,500 for 2023 and $7,000 for 2024 to a traditional IRA, then converted to Roth shortly after. Now I'm trying to file my 2024 taxes and I'm confused. My 1099-R shows a gross distribution of $13,519.53 (the amount grew slightly between when I contributed to the traditional IRA and when I converted to Roth). I know I need to file Form 8606 to report the nondeductible contributions, but I'm lost on how to handle this in TurboTax or FreeTaxUSA. Do I need a separate 8606 for each year? How do I make sure these tax programs handle the Backdoor Roth correctly? I don't want to accidentally pay taxes on this money twice!

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18 comments

Lilah Brooks

•8M

This is a common situation with Backdoor Roth IRAs! You're right that you'll need Form 8606, and yes, you need a separate one for each tax year. For the 2023 contribution, you should have already filed Form 8606 with your 2023 tax return to report the nondeductible contribution of $6,500. If you didn't do this, you'll need to amend your 2023 return. For 2024, you'll file another Form 8606 with your 2024 return to report the $7,000 nondeductible contribution. In both TurboTax and FreeTaxUSA, you need to tell the software you made nondeductible contributions to a traditional IRA. The software should then guide you through Form 8606. When you enter your 1099-R information, make sure to indicate that the distribution was converted to a Roth IRA. The software should calculate that most of your conversion is non-taxable, with only the earnings portion ($19.53) being taxable.

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Lilah Brooks

•8M

If you already filed 2023 taxes without Form 8606, you should file an amended return (Form 1040-X) to include it. There's technically a $50 penalty for not filing Form 8606, but the IRS often waives it if you file an amendment promptly. The order of operations does matter, but you did it correctly - first contribute to traditional, then convert to Roth. The timing is fine even if done in the same month. The important thing is documenting that these were nondeductible contributions to avoid double taxation when you withdraw in retirement.

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Kolton Murphy

•8M

Just wanted to share my experience with this! I was in a similar situation last year and found that https://taxr.ai was super helpful for handling my Backdoor Roth IRA reporting. The system analyzed my 1099-R and other documents and specifically identified that I needed to file Form 8606 for both years. The nice thing was that it showed me exactly where to enter this information in TurboTax - there's a section where you have to manually tell the software these were nondeductible contributions, which isn't always obvious. It also verified that only the earnings portion should be taxable, which saved me from paying taxes on the full conversion amount.

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Kolton Murphy

•8M

It does guide you through the specific screens in TurboTax - there's a section under the IRA contributions part where you need to indicate they were nondeductible. It shows screenshots of where to find these sections, which was really helpful. And yes, it works with FreeTaxUSA too, though the interface is a bit different. The benefit over calling support is that they analyze your actual documents and provide specific guidance for your situation. It absolutely handles the nuance of different years' contributions being converted in the same tax year - that's actually one of the trickier parts that it helped me with, showing how to record the separate 8606 forms.

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Julia Hall

•8M

I was really skeptical about using an AI tax tool, but after struggling with my Backdoor Roth reporting, I decided to try taxr.ai. I'm actually surprised how well it worked! It identified that I needed to file separate 8606 forms and showed me exactly where in TurboTax to indicate nondeductible contributions. The most helpful part was verifying that I only owed taxes on the earnings portion of my conversion ($19.53 in your case). It also explained how to handle the fact that I did 2023 and 2024 contributions in the same calendar year. The document review feature caught that my 1099-R wasn't correctly categorized in the software, which would have resulted in double taxation. Saved me a lot of stress and potentially money.

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Arjun Patel

•8M

If you're really stuck with the IRS forms, I highly recommend using Claimyr to get direct help from the IRS. https://claimyr.com connects you with an actual IRS agent without the usual hours-long wait. There's a video demo at https://youtu.be/_kiP6q8DX5c that shows how it works. I used it when I had a similar Backdoor Roth issue that got complicated - I had messed up my 8606 forms and needed guidance. The service got me through to an IRS tax specialist in about 20 minutes instead of the 3+ hours I spent on previous attempts. The agent walked me through exactly how to report multiple year contributions on Form 8606 and how to fix my previous return.

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Arjun Patel

•8M

They use a system that navigates the IRS phone tree and waits on hold for you. When an agent answers, you get a call back to connect with them. Yes, you could theoretically do it yourself, but most people don't have hours to spend listening to hold music and navigating the complex IRS menu system. I was super skeptical too! I had spent over 4 hours on three separate attempts trying to get through. What Claimyr does is essentially wait in the queue for you, and their system somehow gets prioritized. I don't know all the technical details, but I went from waiting forever to speaking with someone who actually helped resolve my Backdoor Roth reporting issue. The time saved was absolutely worth it.

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Julia Hall

•8M

Ok I need to apologize and admit I was wrong. After my frustration with trying to get IRS help on my Backdoor Roth reporting issues, I tried Claimyr as a last resort. I got connected to an IRS tax specialist in about 25 minutes (my previous attempt had me on hold for over 2 hours before I gave up). The agent was incredibly helpful and walked me through exactly how to report my multiple year Backdoor Roth contributions on separate 8606 forms. They even explained how to amend my previous year's return to include the missing 8606 form and told me the specific wording to use to request a penalty waiver. Saved me hours of frustration and potentially an audit headache. Sometimes it's worth admitting when you're wrong!

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Tony Brooks

•8M

Here's a quick step-by-step for FreeTaxUSA specifically since I just did this: 1. Enter your 1099-R information as normal 2. When it asks about IRA contributions, select that you made nondeductible contributions 3. Enter the contribution amounts for each year separately 4. For the 2023 contribution, it'll ask if you've already reported it on a previous return 5. Make sure to indicate the full conversion to Roth 6. FreeTaxUSA will automatically generate the 8606 forms The software should calculate that only the earnings ($19.53) are taxable. Double check this on the tax summary page.

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Tony Brooks

•8M

The timing of your conversion doesn't matter for tax purposes as long as the contribution was designated properly. So if you made a contribution in January 2024 and specifically designated it for tax year 2023 (which is allowed until the tax filing deadline), then converted it in February 2024, that's perfectly fine. The important thing is that you're clear about which tax year each contribution applies to. The conversion itself is always reported in the calendar year it happens (2024 in your case), but the nondeductible status of the contributions needs to be reported on the tax return for the year they were designated for.

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