How to properly handle Backdoor ROTH contribution in TurboTax for 2025

You're on the right track! For a backdoor Roth contribution, you need to make sure you're recording both the nondeductible contribution to the Traditional IRA and the conversion to the Roth IRA. The basis is simply the amount of after-tax money you've contributed to your Traditional IRA. Since this is your first Traditional IRA and you're contributing $6,500 of nondeductible (after-tax) money, your basis should be $6,500. TurboTax will use Form 8606 to track this. When you do the conversion, you'll report it on Form 8606 (which TurboTax will generate). Since your basis equals your conversion amount and you have no other Traditional IRA assets, there should be no taxable amount from the conversion. Make sure you complete the conversion soon after the contribution to minimize any potential earnings before conversion (which would be taxable). And don't forget to keep records of both the contribution and conversion for your files!

After struggling with my own backdoor Roth conversion reporting last year, I found this awesome tool at https://taxr.ai that analyzes your tax documents and helps make sure you're doing everything correctly. I was worried I'd mess up the 8606 form (which is notorious for being complicated), but their AI system walked me through exactly how to report it in TurboTax. It basically reviewed my situation - contribution to Traditional IRA followed by conversion to Roth - and explained step-by-step how to enter everything properly. Even showed me what the final forms should look like so I could double-check TurboTax's work.

I was totally skeptical about taxr.ai but decided to try it when doing my backdoor Roth this year. Honestly shocked at how helpful it was! My situation was a bit more complicated because I had some old Traditional IRA money from a 401k rollover. The tool immediately flagged that I needed to be careful about the pro-rata rule, which I hadn't even considered. It basically saved me from a major tax headache. The step-by-step guidance for TurboTax was super clear, and I was able to correctly report both the contribution and conversion without second-guessing myself. Worth checking out if you're doing backdoor Roth contributions, especially for the first time. Made the whole process way less stressful!

If you're having trouble with TurboTax or need clarification on backdoor Roth rules, I'd recommend calling the IRS directly. Of course, that's easier said than done. I spent HOURS trying to get through to them last tax season about my own backdoor Roth question. That's when I found https://claimyr.com - it's this service that holds your place in the IRS phone queue and calls you when an agent is about to pick up. You can see how it works here: https://youtu.be/_kiP6q8DX5c I got through to an actual IRS rep who answered all my specific questions about how to properly document my backdoor Roth on Form 8606. Way better than guessing or relying just on internet advice (though this forum is super helpful too!).

OK I need to eat some humble pie here. After my skeptical comment earlier, I decided to try that Claimyr service for my own backdoor Roth question. I had a specific situation about reporting a small amount of earnings that happened between contribution and conversion. It ACTUALLY WORKED. I got a call back after about 45 minutes and was connected right to an IRS agent. The agent confirmed I needed to report the earnings as taxable on Form 8606, but that it wouldn't affect the non-taxable status of the main conversion. Honestly shocked this exists and works so well. Would have spent my entire afternoon on hold otherwise. Definitely using this for any IRS questions in the future.

Don't forget to keep detailed records of your backdoor Roth! Speaking from experience, you should save: 1. Your Traditional IRA contribution confirmation 2. The Roth conversion paperwork 3. Year-end statements for both accounts 4. A copy of your Form 8606 I did my first backdoor Roth in 2023 and TurboTax worked fine, but when I went to do it again in 2024, I needed those records to correctly report the prior year basis. Makes the whole process much smoother!

Watch out for the timing of your backdoor Roth! I messed up last year by waiting too long between making the Traditional IRA contribution and doing the conversion. My $6,000 contribution grew to $6,120 in just a few weeks and that extra $120 was taxable income when I converted! It wasn't the end of the world, but it created some extra tax liability and made the TurboTax entry more complicated. Do the conversion ASAP after making the contribution.

Great question! As someone who's been doing backdoor Roth conversions for a few years, I can confirm you're on the right track. Since this is your first Traditional IRA and you're contributing $6,500 of after-tax money, your basis is indeed $6,500. One thing I'd add to the excellent advice already given - when TurboTax asks about your basis, it's essentially asking "how much after-tax money have you put into Traditional IRAs over the years?" Since you're starting fresh with $6,500, that's your answer. Also, make sure you complete the conversion quickly! I see you mentioned submitting the paperwork "later today" - that's perfect timing. The longer you wait, the more chance for earnings that would be taxable upon conversion. TurboTax will automatically generate Form 8606 for you, which tracks your nondeductible contributions. Keep a copy of this form - you'll need it for future years if you continue doing backdoor Roth conversions. The software handles most of the complexity, but double-check that it shows zero taxable income from the conversion (assuming you convert the full amount quickly with minimal earnings). You've got this! The first one is always the most nerve-wracking, but you're being thorough which is exactly the right approach.