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Question By
JonnyBoy78

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Tradition to Roth IRA conversion - Credit Karma Tax
I've started using the Credit Karma Tax and I have a question about the backdoor Roth IRA. Right now, I contribute the maximum $5500 to a traditional IRA and then roll it over to a Roth IRA immediately. In past years when filling out tax forms on competitors products, it registers as $5500 in income until I get to the deductions part. Then I specify that it was a rollover, and then the program acknowledges it was a nontaxable distribution and amends it so that line 15a says $5500 and 15b says $0 on the 1040. Credit Karma Tax does not seem to make that connection, so the only way I can get the traditional IRA distribution--which has a basis of $5500--to not be taxed is to lie and say it's not a qualified Roth conversion. Is anyone else having this problem, or am I doing something wrong?

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I also have this problem. A credit karma engineer should take a look at how this is done in TurboTax (https://ttlc.intuit.com/questions/2688118-how-to-report-backdoor-roth-in-turbotax-using-a-version-installed-on-my-computer) and ensure that it is possible to do the same in Credit Karma Tax - and get back to us.

@jwsister, we're not asking for tax advice; just for feature parity with TurboTax and other packages that can handle this maneuver. :-)

Reply by
JonnyBoy78

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Thanks for the update ip499.  I'm very excited about Credit Karma's initiative; I do have to say though that I've found several more errors / ommissions in the software so I've stopped using it.  To date: the "stealth Roth contribution" problem, I can't specify previous residential energy credits taken that apply to the lifetime limit, there's a problem on my state return where I can't type something in, the non-1116 form foreign tax credit won't show up even though the information is input from the 1099-DIV in box 6 (and there's no prompt letting you know this is the case), and I can't specify short- or long-term capital gains without doing every single lot individually, which is insane.  I will definitely try the software again next year though, I think it's an awesome initiative, I just don't think it's at the point where I could recommend it yet. 

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Backdoor Roth is supported

Enter the backdoor Roth information in Wages & Info > Pensions, annuities, retirement or IRAs (Form 1099-R).

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This was driving me nuts

Thank you for this post! I am running into the same issue with CK tax and it was driving me nuts it was charging me $6000 extra in taxes than what I should have been paying. I'm going to go back to taxact which can handle this situation I think.

Please keep us posted if someone can find a resolution to this. CK taxes were pretty good otherwise but, i cant afford to pay $6k extra to uncle sam.

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Helpful to 0 out of 10 people

That comes under tax policies and regulations and, as a former tax preparer, I can say that particular topic needs to be discussed with a licensed tax consultant who has access toi the current information 

Reply by
JonnyBoy78

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Yes, well, it was a CPA who showed me how this works a few years ago.  In fairness, this really isn't rocket science.  The competitor's tax return software--I'm doing it twice this year to make sure I feel comfortable with CK--does assess my tax liability the way I was expecting and the way that the CPA showed.  CK is the one that gives me an unexpected and odd answer.

Anyway, if anyone else uses the backdoor Roth contribution and has the same problem I do, please let me know.  And if you find a solution, pleas share.  Thanks so much!

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