Where the Roth conversion appears on your tax return

A Roth conversion is reported on Form 8606, "Nondeductible IRAs," which you file with your federal tax return. This form tells the IRS how much you converted from a traditional IRA to a Roth IRA and how much of that conversion is taxable income in the year you did it. You must file Form 8606 even if you owe no tax on the conversion, because the IRS uses it to track your basis in IRAs and prevent double taxation later.

The amount you converted also flows to your Form 1040 as ordinary income. If you converted $50,000 from a traditional IRA to a Roth, that $50,000 (minus any non-taxable basis you had) becomes taxable income on line 7b of your 2024 Form 1040, labeled "IRA distributions." Your tax software or preparer will calculate this and move it to the right place, but you need to provide the conversion details first.

Key Takeaways

  • Form 8606 is the document that reports your Roth conversion to the IRS, and you must file it even if the conversion creates no tax liability.
  • The taxable portion of your conversion is added to your ordinary income on Form 1040, which may push you into a higher tax bracket.
  • Your IRA custodian (the bank or brokerage holding your account) sends you Form 5498 in May, which shows the conversion amount and helps you complete Form 8606.
  • If you have pre-tax money in any traditional, SEP, or straightforward IRA accounts, the pro-rata rule requires you to count all of it when calculating how much of the conversion is taxable.
  • You report the conversion in the year the money actually moves to the Roth account, not the year you request it or plan it.

What information you need before filing

Gather three pieces of information before you sit down to file. First, get the conversion amount — the total dollars you moved from a traditional IRA to a Roth. Your IRA custodian will send you a statement showing this, and it also appears on Form 5498, which arrives by May 31 of the year after the conversion. Second, find out your basis in the traditional IRA — the amount of non-deductible contributions you made to that account over the years. If you have never made non-deductible contributions, your basis is zero. Third, determine whether you have any other traditional, SEP, or straightforward IRA accounts open on December 31 of the conversion year, because the pro-rata rule affects your tax bill.

If you made non-deductible contributions to a traditional IRA in past years, you should have Form 8606 from those years. Pull those out: they show your cumulative basis. If you cannot find them, you can request prior-year tax returns from the IRS using Form 4506-C, though this takes several weeks.

How the pro-rata rule changes what you owe

The pro-rata rule is the part that trips up most people. It says: if you have any pre-tax money in any traditional, SEP, or straightforward IRA on December 31 of the conversion year, you cannot convert only the after-tax (basis) portion and leave the pre-tax portion behind. Instead, the IRS treats all your IRAs as one pool. The percentage of that pool that is pre-tax is the percentage of your conversion that becomes taxable income.

Here is a concrete example. Suppose you have a traditional IRA with $40,000 of pre-tax money and $10,000 of after-tax basis. You want to convert the $10,000 of basis to a Roth, pay no tax, and leave the $40,000 behind. The pro-rata rule stops you. Your total IRA balance is $50,000. Pre-tax money is 80 percent of that ($40,000 ÷ $50,000). So 80 percent of your $10,000 conversion — that is, $8,000 — becomes taxable income. Only $2,000 is tax-free. The $40,000 stays in the traditional IRA, but now it is $32,000 of pre-tax money plus $8,000 that you already paid tax on (the portion of the conversion that was taxable).

The pro-rata rule applies to the calendar year, not to individual accounts. If you have a traditional IRA at one bank and a SEP IRA at another, the rule counts both. If you have a Roth IRA already, it does not count — Roth accounts are separate. The rule also does not count IRAs held by your spouse, even if you file jointly.

Step-by-step: completing Form 8606

Form 8606 has two parts. Part I is for non-deductible contributions; Part II is for conversions. You will fill out Part II.

On line 16, enter the amount you converted from a traditional IRA to a Roth. This is the number your custodian gave you. On line 17, enter the value of all your traditional, SEP, and straightforward IRAs on December 31 of the conversion year — the total balance across all of them. On line 18, enter your basis (the total non-deductible contributions you have made to traditional IRAs over time, from prior Form 8606s or your records). On line 19, the form calculates the taxable portion using the pro-rata rule. You do not calculate this yourself; the form does it. The result on line 19 is the amount of your conversion that is ordinary income.

If you have never made non-deductible contributions and have no pre-tax money in any traditional IRA, line 18 is zero, line 17 equals line 16, and line 19 will be zero — meaning the entire conversion is tax-free (though this is rare). If you have pre-tax money, line 19 will be greater than zero, and that amount is what you report as income on Form 1040.

Reporting the conversion on Form 1040

The taxable amount from Form 8606, line 19, goes on Form 1040, line 7b, labeled "IRA distributions." You will also see a line 7a for the total amount distributed (which includes the non-taxable portion). If your tax software is linked to Form 8606, it will fill these in automatically. If you are filing by hand or with a preparer, give them the Form 8606 and they will enter the numbers.

This income is added to your other income for the year. If you converted $50,000 and $40,000 of it is taxable, that $40,000 is treated like wages or other ordinary income — it may push you into a higher tax bracket, reduce tax deductions you were counting on (like the education credit), or trigger the net investment income tax if your total income exceeds certain thresholds. This is why many people spread conversions over multiple years: to keep each year's taxable conversion smaller and avoid a sudden jump in tax.

What happens if you miss reporting the conversion

If you do not file Form 8606, the IRS will not know you converted money to a Roth. When you withdraw money from the Roth later (tax-free, as you intended), the IRS may treat it as a taxable distribution from a traditional IRA if they have no record of the conversion. You could end up paying tax twice: once on the conversion you did not report, and again on the withdrawal. Filing Form 8606 creates a paper trail that protects you.

If you filed your return without Form 8606 and realized the mistake later, you can file an amended return using Form 1040-X and attach the Form 8606. The IRS generally accepts amended returns filed within three years of the original return date. If more than three years have passed, you can still file Form 8606 to establish your basis going forward, though you may owe back taxes and penalties on the unreported conversion income.

Roth conversions across multiple accounts and custodians

If you have traditional IRAs at more than one bank or brokerage, each custodian will send you a Form 5498 showing any conversions from their account. You must add up all conversions across all custodians and report the total on Form 8606. The pro-rata rule also counts the balance in all your traditional IRAs, regardless of where they are held.

For example, if you have a traditional IRA at Bank A with $30,000 and a traditional IRA at Bank B with $20,000, and you convert $15,000 from Bank A to a Roth, your total IRA balance for the pro-rata calculation is $50,000 (the $15,000 you converted plus the $35,000 you did not). You report the $15,000 conversion on Form 8606, and the pro-rata rule applies to the full $50,000 pool.

Frequently Asked Questions

Do I report a Roth conversion on my state tax return too?

Most states that have an income tax treat Roth conversions the same way the federal government does: the taxable portion is state income. A few states (Pennsylvania, Illinois, and a handful of others) do not tax IRA distributions at all, so a conversion would not create state tax liability there. Check your state's tax agency website or ask your preparer, because state rules vary.

What if I converted in December but did not receive Form 5498 until May?

You report the conversion in the year it happened, not the year you receive the form. If you converted in December 2024, you report it on your 2024 tax return (filed in 2025), even if Form 5498 does not arrive until May 2025. Use your custodian's statement or confirmation email to get the conversion amount if Form 5498 is delayed.

Can I undo a Roth conversion if I change my mind?

You can reverse a conversion by doing a "recharacterization," which moves the money back to a traditional IRA. However, recharacterizations are only allowed if you do them by the tax-filing important date (including extensions) of the year after the conversion. If you recharacterize, you do not report the conversion on that year's Form 8606. Rules around recharacterization are strict, so talk to a tax preparer before attempting one.

What if I converted a Roth IRA to another Roth IRA?

Moving money between Roth accounts is not a conversion and does not get reported on Form 8606. Form 8606 is only for conversions from a traditional, SEP, or straightforward IRA to a Roth. If you rolled over a Roth IRA to another Roth IRA at a different custodian, you do not report it on your tax return.

Do I need to report a conversion if I converted less than $1,000?

Yes. The IRS requires Form 8606 for any conversion, regardless of amount. Even a $100 conversion must be reported. Form 8606 is how the IRS tracks your basis and prevents you from being taxed twice on the same money, so the threshold does not matter.