Hi,

Maybe somebody can help me clarify questions I’m being asked on our MFJ taxes on FreeTaxUSA. I’ve used this software for a few years now but today i wonder if I’m interpretting the questions correctly.
Our situation is that we’ve always earned above the threshhold for the direct contribution to the Roth IRA and we always used the Backdoor Roth IRA route: Contribute the after-tax money to an IRA and convert it to the Roth IRA within a few days. We never had any pretax IRA basis since our 401k’s with our employers.

First, we answer questions about the issued 1099-R for each of us, but then the next screen asks the following question:

Prior Year IRA Contributions. Most traditional IRA contributions are deductible in the year you make the IRA contribution. However, an IRA contribution can’t be deducted if your income is too high or if you chose to not deduct the IRA contribution. If you had any nondeductible IRA contribution in prior years, the prior year tax return would usually have a Form 8606 showing the amount. Has Sandy ever had a nondeductible traditional IRA contribution on any prior year tax return?

It seems that I should say Yes. Is this a correct answer? So, if I say yes, then I get the following questions:

1) Enter Sandy’s total basis, if any, in traditional IRAs (including SEP and SIMPLE) for 2022 and earlier years. Your prior year tax return will usually have a Form 8606 showing the amount of your IRA basis. The basis in traditional IRAs is the total of all your nondeductible contributions made to traditional IRAs minus the total of all your nontaxable distributions.

Since my after-tax contributions were always converted to the Roth IRA each year, I believe my basis is $0. Is this the correct answer?

2) Enter the value of all Sandy’s traditional, traditional SEP, and traditional SIMPLE IRAs as of December 31, 2023.

I don’t have any money in the traditional IRA (only in the Roth IRA), so I believe the value is $0. Is this correct?

Thank you!