{"id":3437,"date":"2018-03-11T12:08:27","date_gmt":"2018-03-11T19:08:27","guid":{"rendered":"http:\/\/mattfife.com\/?p=3437"},"modified":"2018-03-11T12:36:50","modified_gmt":"2018-03-11T19:36:50","slug":"backdoor-iras-with-turbotax-2017","status":"publish","type":"post","link":"https:\/\/mattfife.com\/?p=3437","title":{"rendered":"Backdoor IRA’s with Turbotax 2017"},"content":{"rendered":"

Ok – Turbotax 2017 has a problem with its entry ordering when handling backdoor Roth IRA’s. If you just follow the normal wizards, you’ll end up with the incorrect information for your IRA contributions either: pay too much tax or be informed you have to pay a penalty for having gone over the IRA contribution limits.<\/p>\n

The solution comes in several parts to get the wizard to figure out the right data. Here’s 3 major pitfalls I hit:<\/p>\n

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  1. If you do automated imports of statements from your financial institute, or you simply enter your IRA contributions\/transfers to Roth IRA on page 1\/’Wages & Income’ section of your federal taxes BEFORE you enter the ‘Traditional and Roth IRA Contributions’ section on the ‘Deductions & Credits’ page 2, then it often calculates your backdoor Roth IRA incorrectly.<\/li>\n
  2. Double-entry and confusion around the word ‘contributed’. You only ‘contributed’ to a traditional IRA. You didn’t contribute to your Roth IRA, you transferred money to it. This can lead to overpayment.<\/li>\n
  3. Confusion about conversions and recharacterizations. They seem interchangeable, but are very different tax terms that result in massively different calculations and even severe penalties if done wrong.<\/li>\n<\/ol>\n

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    Solutions and information:<\/h3>\n

    There are number of write-ups on this topic, but here’s the ones that helped:<\/p>\n