How To Report 2024 Mega Backdoor Roth In H&R Block (Up to date)

(Up to date on January 29, 2025 with screenshots from H&R Block Deluxe downloaded software program for the 2024 tax yr.)

A Mega Backdoor Roth is completely different from an everyday Backdoor Roth. It’s accomplished by making non-Roth after-tax contributions to a 401k-type plan earlier than shifting it to the Roth account inside the 401k-type plan or taking the cash out (with earnings) to a Roth IRA.

It’s an effective way to place further cash right into a Roth account with out having to pay a lot further tax. Not all plans permit non-Roth after-tax contributions however some estimated that 40% of individuals can do it.

Suppose you probably did a Mega Backdoor Roth final yr. You need to have acquired a 1099-R kind out of your 401k plan supplier. You’ll must account for it in your tax return. Right here’s learn how to do it in H&R Block tax software program. If you happen to use TurboTax or FreeTaxUSA, please see:

Use H&R Block Obtain

The screenshots on this submit are from H&R Block Deluxe downloaded software program. The downloaded software program is each inexpensive and extra highly effective than the net model. A consumer reported getting an error from the net model of H&R Block in remark #8. The H&R Block downloaded software program didn’t give that error.

If you happen to haven’t paid on your H&R Block on-line submitting but, you should buy H&R Block downloaded software program from Amazon, Walmart, Newegg, or Workplace Depot and swap to the downloaded software program. If you happen to’re already too far alongside together with your entries, make this your final yr of utilizing the net model and swap to the downloaded model subsequent yr.

Throughout the Plan Or To Roth IRA

You are able to do the mega backdoor Roth in two methods — convert inside the plan or withdraw to a Roth IRA. Changing inside the plan is way simpler, and lots of plans automate the method. Transferring to a Roth IRA additionally works. See the earlier submit Mega Backdoor Roth: Convert Inside Plan or Out to Roth IRA?

Right here’s the situation we’ll use for example:

You contributed $10,000 as non-Roth after-tax contributions to your 401(okay). By the point you transformed the cash to the Roth account inside the plan or transferred it to your Roth IRA, your contributions earned $200. You transformed $10,200 to your Roth account.

I’m utilizing 401(okay) as a shorthand. It really works the identical in a 403(b). If you happen to did a cut up rollover — after-tax contributions to a Roth IRA and the earnings to a Conventional IRA — and the plan administrator issued one 1099-R on your two rollovers, you’ll want to separate your 1099-R into two. See One 1099-R Type for Two Rollovers in TurboTax and H&R Block.

1099-R Entries

Go to Federal -> Revenue -> IRA and Pension Revenue (Type 1099-R). You may import the 1099-R or enter it manually. I’m exhibiting guide entries.

Our 1099-R is a standard 1099-R. Enter the numbers out of your 1099-R as-is. Ours seems to be like this:

The gross quantity transformed to the Roth account reveals up in Field 1. The earnings are in Field 2a. If you happen to didn’t have earnings in your rollover, Field 2a is zero. “Taxable Quantity Not Decided” underneath Field 2b is left unchecked. The quantity of your non-Roth after-tax contributions reveals in Field 5. Field 7 has code G.

The IRA/SEP/SIMPLE field in Field 7 in your 1099-R ought to NOT be checked.

We’re not a retired public security officer.

Rollover Vacation spot

The Roth 401k account is formally a “designated Roth account” within the plan. Select “Designated Roth account” if you happen to transformed inside the plan. Select “Roth IRA” if you happen to took the cash out of the plan to your Roth IRA.

That’s it. It’s so simple as that.

Confirm on Type 1040

Now we confirm we’re taxed solely on the $200 in earnings, and never on the $10,000 non-Roth after-tax contributions.

Click on on “Types” within the high menu bar. Double-click on “Type 1040 and Schedules 1-3” within the varieties record and click on on “Cover Mini WS.”

Scroll down to search out Line 5. The gross quantity transferred to the Roth account reveals on Line 5a. Line 5b reveals you’re taxed solely on the earnings. If you happen to didn’t have earnings, Line 5b will probably be zero.

If you’re accomplished trying on the kind, shut the varieties window to get again to the interview.