Reporting after tax portion of RMD using HR Block software
I made after tax IRA contributions for a few years in the 1990s. I calculated the percentage of my total RMD this year is 0.6%. It’s a small tax benefit, but I can’t see how to report this in the HR Block software. The interviews tell me I’m not eligible, unless I state that I made a contribution in 2024, which I have not done. If I go to form 8606, the form asks for total value of my IRAs as of 12/31/2024. It’s my understanding that the RMD calculation is based on total value as of 12/31/2023. The form also says “we calculate this form automatically”. Going through the questions in the software, there is nothing that allows me to indicate that I have made non deductible contributions. The funds I purchased with the contributions have long since been moved to other funds. Any guidance on how to enter this into the software is appreciated.
Permalink Submitted by Alan - IRA critic on Tue, 2025-03-04 13:06
Not familiar with HRB, but I am sure that you should be able to enter your IRA basis from your last prior 8606, line 14. Any tax program will support this. This amount goes on line 2 of your 2024 8606. Form 8606 then completes the pro rata calculation of the taxable portion of your distribution and show your remaining basis for 2025 on line 14 of the 2024 8606. While your 2024 RMD was based on the 12/31/2023 balance, the taxable portion of that distribution is based on the 12/31/2024 balance. If HRB is asking for the 12/31/2024 balance, it’s either to complete the 8606 or to tell you what your 2025 RMD will be.
Therefore, what you should be looking for is a screen that allows you to enter your IRA basis coming into 2024 that will show up on line 2 of your 2024 8606. It does not matter that you did not make a ND contribution for 2024.
Permalink Submitted by David Kremberg on Thu, 2025-03-06 16:48
Thanks for the reply. I neglected to mention one additional complication. I converted a large 401k balance to IRA in December 2024, to make future RMDs simpler. The IRA balance prior to the conversion was much smaller. The 0.6% calculation I referenced is based on the much smaller IRA balance I had prior to the conversion of the 401k balance. If I need to use the much larger 12/31/24 IRA balance, the percentage of non deductible IRA dollars on that larger balance will make the deduction so small as to not be worth the trouble. I assume based on your answer that’s the case, but would appreciate confirmation.