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Spin-off: Backdoor Roth Basis
Posted on 1/19/23 at 5:44 pm
Posted on 1/19/23 at 5:44 pm
I’ve done the backdoor roth for probably 10 years now. No other Trad IRA balances. I’ve done the 8606 every year. Should I be keeping a spreadsheet of contributions or tracking “basis” somewhere? I get lost in the terminology but list my basis as zero every year on the 8606 and it treats it properly from a tax standpoint.
However, I keep wondering it I’m supposed to be keeping track of these contributions in a spreadsheet or something.
However, I keep wondering it I’m supposed to be keeping track of these contributions in a spreadsheet or something.
This post was edited on 1/19/23 at 5:45 pm
1
Posted on 1/19/23 at 8:47 pm to Finnish
A backdoor is a form of Roth Conversion.
Once that "conversion" is 5 years old, the basis attached to those earnings is no longer a concern.
If you don't meet the 5 year rule, the basis is only important to determine how much you can pull out before anything is taxable (if you have 5 year issues, basis comes out first).
So yes, it would not hurt to track the last 5 years of conversions.
Once that "conversion" is 5 years old, the basis attached to those earnings is no longer a concern.
If you don't meet the 5 year rule, the basis is only important to determine how much you can pull out before anything is taxable (if you have 5 year issues, basis comes out first).
So yes, it would not hurt to track the last 5 years of conversions.
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