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Screen IRA - Traditional and Roth IRA (1040)
To force Form 8606 to print if it has data and whether or not it is required, select
Setup
and then 1040 Individual
. Select the Tax Return button in the Collation group box. Select the Pages that can be forced to print
option in the Focus group box. Select the collation (Government, Client, or Preparer) that you want to modify. Select Form 8606
, then mark the Always if data
option. Select OK
when done.Traditional IRA
UltraTax CS automatically prepares the IRA Worksheet based on the information entered in these fields.
A custom paragraph may be included to report any traditional IRA contributions and due date in the transmittal letter. To select this custom paragraph on a client basis, select a custom paragraph
Traditional IRA Contrib (TL)
from one of the Paragraph Description
fields in the Letter screen. To select this custom paragraph to print for all clients when applicable, selectSetup
and then 1040 Individual
, select either the Letters & Emails
or Filing Instructions
button in the Federal tab, select the Custom Paragraphs
tab, and mark the Traditional IRA Contrib (TL)
box.Covered by a retirement plan?
If a Keogh, SEP, or SIMPLE contribution is present for either the taxpayer or spouse in the Keogh screen, or the
Retirement plan
field is marked in the W2 screen, UltraTax CS assumes that the taxpayer or spouse is covered by a qualified retirement plan for application of the AGI limitation. Enter 2
to force UltraTax CS to ignore these indicators and calculate the traditional IRA deduction(s) without limitations. Enter 1
if either the taxpayer or spouse is a participant in a qualified retirement plan and this information is not indicated anywhere else in the return. UltraTax CS then calculates the traditional IRA deduction(s) with the appropriate AGI limitations applied.note
For married filing separate returns, if the taxpayer is not covered by a retirement plan but the spouse is, the taxpayer is considered covered by a plan unless they lived apart for all of
2024
. If the Filing Status Optimization utility is used, it is important to enter 1
in each spouse's field to indicate they were covered by a retirement plan. UltraTax CS needs this information to calculate the traditional IRA deduction using the applicable limitation. When filing a married filing separate return, enter information for the spouse in this field.Have program compute IRA deduction
Enter
1
if traditional IRA contributions were not made or the maximum allowable deduction for Schedule 1 (Form 1040) is not known. UltraTax CS automatically calculates the maximum allowable deduction and prepares the IRA worksheet. Enter 2
if traditional IRA contributions were not made or the maximum allowable deduction for Schedule 1 (Form 1040) is not known, and the taxpayer wants to make the maximum traditional IRA contribution. UltraTax CS automatically calculates the maximum allowable deduction and the nondeductible portion on the IRA worksheet. The nondeductible amount transfers to Form 8606.note
- Choosing either option1or2will override amounts entered in theTraditional IRA contributionfields.
- When data is entered in theHave program compute IRA deductionfield, any data in theTraditional IRA contributionfield will be reported in the Traditional IRA Contrib (TL) custom paragraph as the amount already contributed. The Traditional IRA Contrib (TL) custom paragraph will only indicate that an excess amount should be withdrawn due to exceeding allowable contribution limits and not whether the contributions were allowed to be deducted.
Total traditional IRA contribution
Enter the total amount contributed to the taxpayer's and spouse's traditional IRA accounts for the tax year ending 12/31/
2024
, if applicable. Amounts entered in this field are overridden when you enter data in the Have program compute IRA deduction
fields.note
- For2024, the maximum allowed IRA contribution is $7,000 for taxpayers under age 50, and $8,000 for taxpayers age 50 and older.
- When data is entered in theHave program compute IRA deductionfield, data in this field will be reported in the Traditional IRA Contrib (TL) custom paragraph as the amount already contributed. The Traditional IRA Contrib (TL) custom paragraph will only indicate that an excess amount should be withdrawn due to exceeding allowable contribution limits and not whether the contributions were allowed to be deducted.
- To view the calculation of the deductible and nondeductible portion of the traditional IRA contribution, review the Traditional IRA Deduction Worksheet in the IRA folder in forms view.
Traditional IRA contributions made
Enter the amount of traditional IRA contributions already made by the taxpayer. UltraTax CS uses this amount to generate a custom paragraph indicating to the taxpayer the remaining contribution to be made.
Adjustment to earned income
Traditional and Roth IRA contributions may be limited by the amount of qualified IRA compensation earned. Enter an amount to adjust earned income used for the calculation of qualified IRA compensation. For example, amounts not subject to self-employment taxes because of religious beliefs should be entered here to be included in the amount calculated as qualified IRA compensation. Negative entries are treated as subtractions.
Adjustment to earned income for Tax Projection Wrk
Enter an amount to adjust the Tax Projection Worksheet (TPW) IRA compensation amount only. For example, you may use these fields to include certain non-tuition fellowship and stipend payments that are allowed for tax years beginning after December 31, 2019 (per the Further Consolidated Appropriations Act). Note that negative entries are treated as subtractions.
Designated nondeductible contributions (Force)
Enter the traditional IRA contributions that have been designated as nondeductible and that have not been converted to a Roth IRA. Entries here override the calculated amounts and are not subject to limitations. This information transfers to Form 8606, line 1.
Designated nondeductible contribution made in
2025
for 2024
In the fields provided, enter the traditional IRA contributions made between 1/1/
2025
and 4/15/2025
that have been designated as nondeductible for 2024
and that have not been converted to a Roth IRA. This information transfers to Form 8606, line 4.Traditional IRA basis
Enter the traditional IRA basis on 12/31/
2023
in this field. This information transfers to Form 8606, line 2. UltraTax CS tracks and proformas this information automatically. If nondeductible contributions were made to a traditional IRA in 2023
before converting those funds to a Roth IRA, add that amount to prior-year traditional IRA basis entered in this field. You may enter 0
(zero) in this field.Traditional IRA value on 12/31/
2024
(including rollovers)Use the attached statement to enter the total value of all traditional IRAs on 12/31/
2024
plus any outstanding rollovers. An outstanding rollover is any distribution amount that has the following three characteristics.- It was received within 60 days of the end of the year.
- It has not been rolled over into another IRA before 12/31/2024.
- It will be rolled over within the normal 60-day rollover period.
note
If the taxpayer or spouse has made a traditional IRA contribution and modified AGI calculations are necessary to determine how much of the contribution is deductible, and the taxpayer received an IRA distribution in the current year, the Taxable IRA Distributions with IRA Contributions worksheet is calculated. UltraTax CS automatically calculates both the taxable and nontaxable portions of the distribution for purposes of Form 8606, lines 11, 12, 15, and 18.
Total distribution received on all traditional IRAs (For calculation of loss deduction - State use only)
Enter
X
to indicate that the distributions for traditional IRAs received this year are the final distributions for all IRAs, where the distributions are less than the basis in the total traditional IRA accounts. UltraTax CS calculates the difference between the distributions and the basis in case you need to report it on the state return.Nondeductible contributions made on or before total distrib rec'd
You may enter
0
(zero) in this field.Nondeductible contributions made after total distrib rec'd
You may enter
0
(zero) in this field.Force
If Form 8606 is filed by itself rather than with the 1040 return, the taxpayer's address is required. Enter
1
in this field to force the address to print, or enter 2
to suppress the printing of Form 8606.Roth IRA
A custom paragraph may be included to report any traditional IRA contributions and due date in the transmittal letter. To select this custom paragraph on a client basis, select a custom paragraph
Roth IRA Contributions (TL)
from one of the Paragraph Description
fields in the Letter screen. To select this custom paragraph to print for all clients when applicable, selectSetup
and then 1040 Individual
, select either the Letters & Emails
or Filing Instructions
button in the Federal tab, select the Custom Paragraphs tab, and mark the Roth IRA Contributions (TL)
box. Have program compute maximum Roth IRA contribution
This option overrides amounts entered in the Roth IRA contribution fields. If a contribution was made to a Roth IRA and later recharacterized to a traditional IRA, leave these fields blank.
Total Roth IRA contribution
Enter the total amount contributed to the taxpayer's and spouse's Roth IRA accounts for the tax year ending 12/31/
2024
, if applicable. UltraTax CS uses this amount in the calculation of Form 8606, line 22 and the taxpayer's and spouse's Roth contribution IRA basis.note
If a contribution was made to a Roth IRA and later recharacterized to a traditional IRA, leave these fields blank. Enter recharacterized Roth IRA contribution amounts in the 1099R screen; the recharacterized contribution amount in the
Gross distribution
field, code N
or R
in the Distribution code
field, code 3
in the Recharacterization type
field, and the amount of the original Roth IRA contribution in the Original conversion or contribution
field.Roth IRA contributions made
If additional contributions are going to be made to a Roth IRA for the tax year
2024
, enter the total amount of all contributions for the year in this field. UltraTax CS calculates the Roth IRA Contribution Worksheet using this amount instead of the contributions entered in the total Roth IRA contribution field.Adjustment to modified adjusted gross income
Enter the amount to adjust the calculated adjusted gross income for Roth IRA calculation purposes. Adjustments for recalculated taxable Social Security and passive activity losses allowed under the special allowance for rental real estate activities should be entered in this field. The adjustment is for the Roth IRA calculation only. Negative entries are treated as subtractions.
Conversion from traditional IRAs to Roth IRAs
The code in this field determines which lines of Form 8606 are calculated based upon Form 8606 instructions.
Enter the amount a
2024
Roth IRA conversion should be adjusted byEntries here adjust the UltraTax CS-calculated amounts that calculated using information from the 1099R and 1099R-3 screens. This information is used when calculating the net amount that transfers to Form 8606, lines 8 or 16. You may enter
0
(zero) in this field.Roth IRA basis, Form 8606 line 17 (Force)
When converting a Traditional IRA to a Roth IRA, UltraTax CS first determines the traditional IRA basis then calculates the taxable and non-taxable portion of the conversion or distribution. This calculation is completed on Form 8606, Part I. If Form 8606, line 11 (non-taxable amount) has an amount, then that amount is used on Form 8606, line 17.
Use the
Roth IRA basis, Form 8606 line 17 (Force)
field when either the non-taxable portion of the conversion is zero (Form 8606, line 11) or Form 8606, Part I is not calculating. This information transfers to Form 8606, line 17. UltraTax CS tracks and proformas this information automatically. You may enter 0
(zero) in this field.note
If nondeductible contributions were made to a traditional IRA in
2023
before the conversion to a Roth IRA, add that amount to the amount in the Traditional IRA basis
field in the Traditional IRA section. Roth IRA contribution basis on 12/31/
2023
Enter the basis in Roth IRA contributions calculated using the Worksheet for Determining Roth IRA Basis Amounts included with Form 8606 instructions. UltraTax CS tracks and proformas this information automatically. You may enter
0
(zero) in this field.Roth IRA contribution recharacterizations
Enter the amount of Roth IRA contribution recharacterizations to be used in the calculation of the amount reported on Form 8606, line 24 to override calculated amounts calculated from entries in the 1099R and 1099R-3 screens. You may enter
0
(zero) in this field.Roth IRA conversion basis on 12/31/
2023
Enter the basis in Roth IRA conversions calculated using the Worksheet for Determining Roth IRA Basis Amounts included with the Form 8606 instructions. UltraTax CS automatically tracks and proformas this information. You may enter
0
(zero) in this field.Roth IRA value on 12/31/
2024
(including rollovers)This information transfers to Form 5329, when applicable.
Total distribution received on all Roth IRAs (For calculation of loss deduction – State use only)
Enter
X
to indicate that the distributions for Roth IRAs received this year are the final distributions for all Roth IRAs, where the distributions are less than the basis in the total Roth IRA accounts. UltraTax CS calculates the difference between the distributions and the basis in case you need to report it on the state return.Contributions made on or before total distrib rec'd
You may enter
0
(zero) in this field.Contributions made after total distrib rec'd
You may enter
0
(zero) in this field.Indicate surviving spouse election
Enter
X
in this field to indicate a taxpayer (or spouse) has died during the current tax year and whose spouse has acquired the taxpayer's entire interest in any Roth IRA owned by the taxpayer. Refer to Code Sec. 408A(d)(3)(E)(ii)(I) for further information regarding this election.Conversion basis not subject to additional tax (Form 5329 only)
If a traditional IRA was converted, or a qualified retirement plan was rolled over to a Roth IRA, and in 2010 an early Roth IRA distribution is received, enter the portion of the basis in conversions from traditional IRAs, used on Form 8606, line 24 to calculate the taxable portion of the Roth IRA distribution that is from nondeductible contributions to the traditional IRA or from conversions greater than five years ago. Also include any qualified retirement plan contributions that were taxable when rolled over to a Roth IRA. UltraTax CS subtracts this amount from Form 8606, line 23 to calculate the amount for Form 5329, line 1.
The entry required here is the portion of the basis in IRA conversions and retirement plan rollovers used to exclude the early Roth IRA distributions from the additional 10-percent tax on Form 5329. Refer to the example on Page 3 of the Form 5329 instructions for further information.