Hello -
In 2023, I opened a Traditional IRA Brokerage Account with Vanguard so I could make what is called a Backdoor Roth IRA contribution (because of income limits I no longer qualify for a Roth IRA). In 2023, I made a $6,000 contribution to my Traditional IRA Brokerage Account for tax year 2022. I reported this amount on Form 8606 when filing my 2022 taxes. I then converted this to a Roth IRA in 2023 (this will be reported on form 8606 when filling my 2023 taxes). In 2023, I also contributed $6,500 to my Traditional IRA Brokerage Account for tax year 2023. I then converted this to a Roth IRA in 2023. Both transactions will be reported on Form 8606 when filing my 2023 taxes.
That said, I recently received a tax document from Vanguard called 2023 Form 1099-R. Below are the values on the form. I need help understanding what they mean and how I should report these numbers when filing my 2023 taxes. Please help me understand what is being reported here.
1. Gross distribution = $12,503.58
2a Taxable Amount = $12,503.58
2b Taxable amount not determined = (X)
Total distribution = (X)
7 Distribution code(s) = 2
IRA/SEP/SIMPLE = (X)
8 Other amount
Other amount percentage = %
9a Your percentage of total distribution = %
12 FATCA filing requirement = ( )
16 State distribution = $12.503.58
In 2022 on Form 8606, I reported the $6,000 contribution to a Traditional IRA
In 2023 on Form 8606, I need to report the $6,000 conversion to a Roth IRA
In 2023 on Form 8606, I need to report the $6,500 contribution to a Traditional IRA and then converting to a Roth IRA
The Vanguard Form 1099-R states $12,503.58 and not $12,500 (2022 = $6,000 & 2023 = $6,500). The difference is because the value of the contribution grew as I was converting from a Traditional IRA to a Roth IRA. I am assuming I will have to pay taxes on the $3.58.
Please help me understand how to correctly report the necessary information when filing my taxes.
Thank you so much
