I'm trying to figure out why doing my 2023 backdoor Roth contribution in 2024 versus within the 2023 calendar year makes such a difference to my taxes due.
I did a backdoor Roth contribution for the 2023 tax year, with both parts of the transaction happening in Jan 2024.
When I go to enter the original 2023 Traditional IRA contribution in the deductions section, I put the $6500 contribution down, and then one of the following questions is how much of the contribution was made after 1 Jan 2024. The correct answer is all of it, so I put $6500 in that box - this makes no change to my taxes due. However, out of curiosity I also tried putting 0 in that box - as if I had made the 2023 contribution in calendar year 2023. When I do this my taxes due go down significantly - a couple thousand dollars.
Why is this?? I was under the impression that in terms of taxes it makes no difference whether you make your IRA contribution in the "correct" year or before 15 April of the following calendar year?
