Made a 2024 backdoor Roth conversion on January 3rd 2025, what are my options now?

Wait I'm confused...if I contributed to a Traditional IRA in December 2024 but didn't convert it to Roth until January 2025, do I still need to file the 8606 with my 2024 taxes? And then report the actual conversion with my 2025 taxes next year?

Yes, you absolutely need to file Form 8606 with your 2024 tax return to report the non-deductible Traditional IRA contribution you made in 2024. This establishes your basis in the IRA, which is critical for avoiding double taxation when you report the conversion next year. The conversion itself will be reported on your 2025 tax return when you file in 2026, using the 1099-R that Fidelity will issue early next year. Without filing the 8606 now, the IRS might think you're trying to convert pre-tax money without paying taxes on it when you report the conversion next year.

Does it work with accounts from other brokerages too? I have Vanguard and am doing my first backdoor Roth this year.

I'm skeptical about these tax tools. Can it actually help with the timing issues around backdoor Roth conversions? Like does it generate the actual 8606 form with the right basis numbers?

Yes, it works with all major brokerages including Vanguard. I've personally tested it with statements from both Fidelity and Schwab, and friends have used it with Vanguard without issues. The system is designed to read financial documents from any institution. Regarding your skepticism, I totally get it - I felt the same way. But it actually does generate the correct numbers for Form 8606 and shows you exactly where to put them. For backdoor Roth conversions specifically, it calculates your non-deductible basis and explains how to report it this year, then gives you guidance to save for next year when you'll report the actual conversion. It essentially does the math and timing calculations that trip most people up.

How does this even work? I thought it was impossible to get through to the IRS this time of year.

Sounds like a scam to me. Nobody can magically get you through to the IRS faster than their own phone system allows. They probably just connect you to some random "tax expert" who isn't actually with the IRS.

It's not magic - they use a system that continuously dials the IRS until it gets through, then connects you once a line is available. It's basically like having someone sit there and redial for you constantly until they reach a human. The service definitely connects you to actual IRS agents, not random experts. When I got through, I was talking to a real IRS customer service rep who verified my identity and everything. You can tell it's the real IRS system from the hold messages and verification process. They're just solving the "busy signal" problem that makes it nearly impossible to get through during tax season.

Thankfully I don't have any other traditional IRA funds - I specifically opened a new traditional IRA account for the backdoor process. Would having a 401k from my employer affect this at all? Or is it only other IRAs that trigger that pro-rata rule?

You're good then! Having a 401k doesn't trigger the pro-rata rule - it only applies to Traditional IRAs, SEP IRAs, and SIMPLE IRAs. 401k accounts are completely separate and don't factor into the pro-rata calculations at all. That's actually why some people with existing Traditional IRA balances will roll those into their 401k plans before doing backdoor Roth conversions - it clears the way for a clean backdoor process without pro-rata complications.

This is actually really smart. I'm going to do this next year to avoid the headache. Do you have to wait any specific amount of time between the contribution and the conversion?

There's no required waiting period between the contribution and conversion - you can literally do them on the same day if you want. Some people worry about the "step transaction doctrine" but the IRS has never challenged backdoor Roth conversions done quickly. The key is just making sure you don't take a deduction for the Traditional IRA contribution since you're converting it right away. Your approach of doing everything in December is definitely the cleanest way to handle the paperwork timing.

This is such an important point that I wish more people knew about! I made the mistake of not keeping proper records of my Form 8606 from a few years back and when I got audited, it turned into a nightmare trying to prove my basis. The IRS initially wanted to tax the entire conversion amount because they couldn't see that I had already reported the non-deductible contribution. Had to dig through old tax software files and bank statements to reconstruct everything. Now I keep both digital and physical copies of all my backdoor Roth paperwork in a dedicated folder. For anyone reading this - treat that 8606 like it's made of gold, because proving your basis later without it is incredibly difficult and stressful.