@madhavvi wrote:
Is there a possibility of TurboTax including worksheet in tax return to avoid IRS questions given this may result in a more favorable tax treatment for non deductible contributions as part of a Roth back door conversion than instructions on form 8606?
I had a hard time wrapping my feeble brain around this also - how could a contribution made in 2021 for 2020 apply to a 2020 conversion? - did not make sense.
But it has been pointed out to me that the actual law that Congress wrote that allows prior years contributions to be made up to the due date of the prior years tax return states that the contribution made before the due date is "deemed to have been made on Dec 31 of the preceding tax year" which makes it a 2020 contribution made in 2020 for tax purposes .
So it can be applied to the 2020 conversion which is probably the reason for having the IRS worksheet 1-1, otherwise it would not be allowed under the normal 8606 rules.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
