Help on taxes (Taxact) and recharacterizations/nondeductable IRA contributions..

[jeromedawg]

Hey all,

So I foolishly made the decision to recharacterize my Roth IRA to Traditional back in November because I thought I could deduct it all - I didn't realize the income cap of $116k at the time though and just realized it recently (doh). Our magi is above that so I unfortunately cannot deduct any of the recharacterized Traditional IRA contributions.

That said, I know I still have to report the recharacterization and also the nondeductable income. I'm not sure if I'm doing it right but here are the details...

Wife:
$5500 contributed to her 2014 Roth IRA total
$5277.88 ($5038 + gains) recharacterized from Roth to a Trad IRA in November
$462 I contributed to her Roth IRA after the recharacterization for whatever reason - I probably just didn't realize it

In her case, $5500 was reported as Roth contributions, and added her 1099-R (provided from Fidelity) for $5277.88. A form 8606 was not filled out for her since she did not make any nondeductable IRA contributions.

Me:
$4995 contributed to 2014 Roth IRA total
$5285.21 ($4995 + gains) recharacterized from Roth to a Trad IRA in November
$505 I contributed to my Traditional IRA after the recharacterization but this was nondeductable.

In my case, I reported $4995 as Roth contributions, and added the 1099-R for $5285.21. I also filled out a Form 8606 for myself, reporting the $505 of nondeductable [Traditional] IRA contributions.


So, did I file this all correctly?

I *think* I did (did this in Taxact but it's not very easy to navigate doing this on their site either).

Just wanted to double-check before I move on with filing (I'm still probably gonna scrutinize my return several times before I file of course).


Thanks all!

[jeromedawg]

Anyone?

[MDM]

The IRS reporting parts seem ok, but I defer to your more detailed study and anyone who has experience with a similar situation.

Are you planning to "backdoor Roth" the money out of the tIRA and into the Roth ASAP?

[jeromedawg]

The IRS reporting parts seem ok, but I defer to your more detailed study and anyone who has experience with a similar situation.

Are you planning to "backdoor Roth" the money out of the tIRA and into the Roth ASAP?

Pretty much. I've actually already converted both my tIRAs over to Roths within the past day - I confirmed that since it's all nondeductable it should be fine. Except, there was an amount of taxable money in my tIRA that I had rolled in from my previous employer's 401k - fortunately it's not all that much ($1500~) so I went ahead and just did it. I figure it's best just to get it dealt with now than to let it compound and grow even more and to have to deal with all the taxes on it later.