Keeping Track of Your Roth Conversion: Key Tax Forms
How to Complete IRS Form 8606 (for a Backdoor Roth IRA; YouTube link ) There are two key tax reports you'll want to receive for a Roth conversion: Form 1099-R from your custodian (the financial institution holding your traditional IRA): This form reports the total distribution amount from your traditional IRA. In the case of a Roth conversion, the distribution amount will represent the fair market value of your entire traditional IRA account (including contributions and earnings) on the conversion date. Box 7 of the 1099-R will likely have a code indicating a rollover or conversion (typically code "R"). Form 8606 (titled "Nondeductible IRAs"): This form, filed with your tax return, tells the IRS how much of your Roth conversion was from non-deductible contributions you previously made to your traditional IRA. It's important to report this correctly, as only the portion converted from earnings in your traditional IRA is taxable. This form he...