I already know the basic concept of backdoor Roth IRA, now I have some very specific questions:
I have a full time job with 6 figure salary. I am an somewhat active trader and my total income depends on stock capital gain. If my stock capital gain is fine, and I may not be qualified for roth IRA contribution directly; of course, if I have stock capital loss, then I may be qualified for full Roth IRA contribution or partial Roth IRA contribution. So at this point, I don't know what my 2021 income will be (I think it will be likely that I am not qualified for Roth IRA contribution), to be safe, I would like to contribute to traditional IRA NOW then transfer money to Roth IRA (backdoor Roth IRA).
I think that my traditional IRA will not be deductible or partially deductible (due to income limit and workplace retirement plan), so it is likely that my traditional IRA contribution will be after-tax money too.
When I file 2021 tax return: how should I report two activities --- Traditional IRA contribution and Backdoor Roth transfer? As I remember, Turbotax does ask IRA contribution, but how should I report backdoor Roth transfer? What form should I use? Exactly how should I handle it if I file tax return with Turbotax?
If I contribute $6000 to traditional IRA now, if it is partially deductible (some contribution is after-tax money and some contribution is before-tax money), then I should pay tax on some of transferred amount. In this case, where will the tax be paid from? For example, if I need to pay $300 tax on the $6000 transfer, can I transfer all the $6000 and pay $300 tax from bank account next year? Or $300 tax has to be deducted from traditional IRA account before being transferred?
Thanks.
