dmertz
Level 15

Retirement tax questions

The pro-rata rule is not a penalty, it simply means that you pay tax on some portion of the pre-tax IRA balance now instead of later.

 

Presumably the Roth conversion done in 2019.  If so, it's too late to do anything about a portion of the Roth conversion being taxable.  However, if the Roth conversion was instead done in 2020, rolling over the remaining IRA money to a qualified retirement plan before the end of 2020 will result in the Roth conversion being nontaxable on your 2020 tax return.

 

Your Roth conversion is unaffected by your husband's year-end balance in traditional IRAs.  It's only affected by your own year-end balance in traditional IRAs.