<prompt> Human: I recently got a letter from the IRS saying I underpaid my 2016 taxes. It looks like they are treating my backdoor roth conversion as taxable income, and now saying i owe an additional 1.6k, roughly. The letter lists these discrepancies:shown on returnas corrected by IRSdifference:-:-:-:-retirement income taxable055005500x200B;shown on returnreported by othersdifference:-:-:-:-retirement income taxable055005500roth conversion550055000x200B;So...Im not sure where to look my 2016 forms to see what i did right or wrong. I filed via turbotax and i think the relevant forms here are forms 1040 and 8606. If the backdoor was the only retirement account activity in my 2016 return, which lines of which forms should reflect this? like ... line X of form 1040 should show 5500 and line Y should show -5500, or something to that effect?Secondly, whats the best way to fix this if it can be fixed? Is this something I can easily fix on my own or am I going to have to get help from an accountant?x200B;thanks in advance for any help.  <response>: Where did the 5500 come from that you converted to Roth? The IRS treats all traditional IRA accounts as one big IRA when considering money taken from any traditional IRA account, and so one frequently ends up paying income tax on a backdoor conversion. For example, if you started 2016 with 49500 previously contributed to traditional IRAs for which you previously had taken a deduction and you then added 5500 in 2016 intending to do a backdoor conversion, you now have 55000 contributed to your traditional IRAs. Of your total traditional IRAs you took a tax deduction on 90 of the contributions and will have to pay income tax on 90 of the amount converted to a Roth.Of course, if you didnt make a contribution to a traditional IRA in 2016 and simply converted money contributed and for which you took a deduction in previous years, you have to pay income tax on the whole 5500 that was converted in 2016. IRAs can be confusing, and I would recommend always consulting with a tax expert for more than anything than a straight contribution andor associated deduction. 