Roth conversion
Client in early 2009 made their $5,000 Traditional IRA contribution. In December 2009, they converted the $10,000 from their IRA to a Roth IRA. How do you handle the contribution and conversion? What tax forms do you use?
Client in early 2009 made their $5,000 Traditional IRA contribution. In December 2009, they converted the $10,000 from their IRA to a Roth IRA. How do you handle the contribution and conversion? What tax forms do you use?
Permalink Submitted by Alan Spross on Thu, 2010-03-04 21:44
If the 5,000 TIRA contribution is deductible, the deduction just goes on line 32 of Form 1040.
If not deductible, it is reported on Part I of Form 8606.
The Roth conversion is reported on Form 8606, Part II. But if there have ever been any non deductible contributions to a TIRA, including the 2009 contribution, Part I needs to be completed before Part II. The taxable portion of the conversion then transfers over to line 15b of Form 1040.
If their income is low enough to qualify for the Savers Credit, they will also need a Form 8880 to report the 5,000 contribution.