1. No, you do not need to amend your 2020 tax return. It seems that your 2020 Form 8606 is correct since it shows the correct new basis (from the recharacterization), provided that your wife did not have any basis in her SIMPLE IRA (or you had a basis in any other traditional IRA, SEP, or SIMPLE IRA). You didn't have to enter the value since you did not convert any funds in 2020.
2. Yes, on your 2021 tax return for the value on December 2021you will combine the value of all your traditional IRA, SEP, and SIMPLE IRA and enter this (do the same for your wife). You stated that you recharacterized the 2021 in 2022 therefore be sure to enter the amount under "Outstanding Recharacterizations" on the "Tell Us the Value of Your Traditional IRA" screen
3. Yes, you will recharacterize 2021 Roth over-contributions to Traditional IRA. To review instructions please see Option 1: Recharacterize the Roth IRA contribution. (To verify, you entered the recharacterization like this on your 2020 tax return as well.)
4. Yes, you will make the traditional IRA contribution non-deductible since you are converting them to Roth.
5. Yes, you and your wife should have a value on line 6 (you had an outstanding recharacterization)
6-8. Yes, you will have to pay taxes on part of the 2021 conversion because your wife had deductible contributions in the SIMPLE IRA and if you had any earnings. The rest of the portion will be taxable in 2022 with the 2022 conversion.
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