Hopefully someone can provide some insight on this.
I use HR Block software to do my taxes, and it filled out the 8606 form correctly in 2023 (first year we used the backdoor roth). The 2024 form was filled out incorrectly though. It put 7000 in box 14 instead of 13, and didn't populate page 2 at all. 2023 form is below for comparison.
I couldn't find a way to view the form before submitting, then found the error after I submitted. I'm not sure what this means. It didn't seem to affect my tax burden last year, but don't know if the erroneous basis would get carried forward or pro rated or what.
Also, how do I submit a revision?!? I can't seem to do it through the Block software.
Thanks for any help.
Apparently can't post screenshots. Bottom line, 2023 filled out correctly. 2024 populated the total basis in block 14 instead of the nontaxable portion in box 13.
Edit: now images showing up...
I don't use HR block, I'm a freetaxusa user, but you should be able to submit an amended tax return to fix this error. If you don't fix it, the way its done would make it appear to the IRS as if you owed taxes due to the pro rata rule (get confirmation, I'm not a tax expert). You might have had trouble finding the info because the specific term to look for is "amended return". Here is the FAQ from HR Block on how to file an amended return.
Before you go through the effort of filing an amended return, you might try just giving the IRS a call and explaining the issue to the agents, when I've called (though that was years ago, so things may be different now with recent events) the agent was understanding, helpful, and actually fixed an issue very similar to yours on their end without requiring me to submit anything. In my case, I didn't fill out an 8606 at all, so I got a letter from the IRS a couple years later saying I owed tax because it looked like my backdoor roth was just a distribution from an IRA. They will probably just tell you to file the amended return, but it couldn't hurt to give them a ring if the hold times aren't too long.
Here are resources for contacting the IRS, there are also local taxpayer assistance centers that you could go to in person.
IMO avoid HR Block, TurboTax, etc because they actively lobby to make taxes more difficult so you have to pay for their services.
When I screwed this up my first time it DID make a big difference in my tax liability. I ended up filing an amended return about 2 years later to correct it and got a decent sized check in the mail.
So what do you recommend then?
FreetaxUSA
I recommend either FreeTaxUSA or just filling out the fillable PDFs. Software asks questions in cute, friendly ways but hides the real questions. The IRS forms are straightforward but you need to know which forms to file (not hard for most people). It’s not hard to ditch the middleman.
There are usually online tutorials that are updated yearly for HRB and TT that tell you exactly what to click to file for backdoor roth correctly. I always have the tutorial up when filing to make sure it is correct.
That’s true but if you need a step by step guide to use the software correctly then I’d argue it’s bad software. What’s even the point of using tax software if you need to follow these guides? Might as well fill out the forms and know they’re correct.
Until recently the back door was not clearly sanctioned which is why it has that name.
It’s been pretty clear since 2018 when the IRS clarified that it is allowed and before then it was pretty well assumed to be ok.
line 5 and 13. its not basis. you answered something wrong somewhere im guessing.
Yeah i must have, now need to amend. But somehow it was filled out correctly the year prior…oh well
Consider using FreeTaxUSA this year.
I will definitely take a look, thank you