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I funded a traditional IRA and then converted it to Roth IRA via Roth back door conversion last year. What do I have to do for taxes this year?
AI accountant’s answer:
When you perform a backdoor Roth IRA conversion, you'll need to report this on your tax return. Here's what you need to do: 1. Report the Traditional IRA contribution: You'll receive a Form 5498 from your IRA custodian showing the contribution to your Traditional IRA. Even though you don't take the deduction on your tax return, you must report this IRA contribution on Form 1040, Schedule 1, line 20, "IRA Deduction." Enter zero (or the portion you're not deducting) in this line, which indicates you made a nondeductible contribution. 2. File Form 8606: To document the nondeductible Traditional IRA contribution and the subsequent Roth conversion properly, you need to file Form 8606, "Nondeductible IRAs," with your tax return. On Part I of Form 8606, you'll provide information about the nondeductible contribution. On Part II of the form, you'll report the Roth conversion details. 3. Check for potential taxes owed: If your Traditional IRA held only nondeductible contributions and you converted the entire balance, there shouldn't be any taxable income related to the Roth conversion. However, if the account had earnings or deductible contributions and their respective earnings, you'll need to pay taxes on the taxable portion of the conversion. Remember to keep records of your IRA contributions and conversions for future reference, as it's essential to track your basis in the Traditional IRA and Roth IRA.
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Keeper’s AI Accountant

This AI accountant is powered by GPT-4, but has up-to-date knowledge of tax law. It’s been trained on federal and state tax updates for 2023. With credentialed tax professionals fact-checking its responses, it applies IRS rules to real-world situations.

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Ask an AI Accountant

A free tool by

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What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

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This is some text inside of a div block.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Not Correct.
Icon check
Looks good

Keeper’s AI Accountant

This AI accountant is powered by GPT-4, but has up-to-date knowledge of tax law. It’s been trained on federal and state tax updates for 2023. With credentialed tax professionals fact-checking its responses, it applies IRS rules to real-world situations.

Find write-offs.
File taxes.

Keeper helps independent contractors and freelancers discover tax deductions and file taxes.

Get started