Desktop: Form 8606 - Back-Door Roth Conversion

How Can I Enter Form 8606 - Back-Door Roth Conversion on the Desktop? 

Form 8606 is used for, among others, reporting a "backdoor Roth IRA" conversion. This is a non-IRS term referring to the Conversion of funds to a Roth IRA from either a traditional IRA or 401 (k) plan. Money rolled into the IRA is subject to tax provided that it has not been taxed. This includes income from the money until such time that it is converted to a Roth IRA. 

To report a backdoor Roth IRA Conversion: 

• Go to the Main Menu of the tax return (Form 1040) 
• From the menu select Adjustments 
• Proceed to Nondeductible IRAs - If you are filing an MFJ, indicate whether it is for the Taxpayer or their Spouse. 
• Then select Traditional IRAs 
• Lastly, click on Net Amount of Traditional IRAs Converted to Roth IRAs - Enter the converted amount 

The amount that is to be taxed will roll onto Line 4b of Form 1040 as a Taxable IRA Distribution. 

Additional Information:

IRS: FAQs Regarding IRA Rollovers and Roth Conversions

IRS: Topic No. 451 Individual Retirement Arrangements (IRAs)

IRS: Topic No. 413 Rollovers from Retirement Plans

IRS: Instructions for Form 8606, Non-Deductible IRAs

IRS: Publication 590-A, Individual Retirement Arrangements (IRAs) 2020 - need to update for 2021