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Retirement tax questions
Hi Dana, thank you for all your replies, they are all very helpful. I think I generally understand, but just wanted to clarify before I go on ahead.
I have a similar situation as many above that I need to somehow resolve. In January of this 2022, I made a contribution of $6000 to the 2021 Roth IRA contribution limit and $6000 more for the 2022 Roth IRA contribution limit. Then I purchased shares using them. I later realized that my MAGI was over the limit, so I had to recharacterize both contributions to a traditional IRA. I think the 2021 contribution was recharacterized on 1/12/22, and 2022 contribution was recharacterized on 1/14/22 (not sure which one is which, since I did not get a 1099R from fidelity yet). Then after that, I backdoored (conversion) the traditional IRA stuff into the Roth IRA together.
First question, since the 2022 contribution was recharacterized into a traditional IRA that technically had some money inside it, does that incur a fee due to the pro-rata rule? All my contributions in my IRAs are from after-tax contributions, so I don't think so, but not sure.
Second question, I know I will get a 1099R form for the recharacterization of 2021 contribution (made in 2022), 1099R form for the recharacterization of 2022 contribution, and a 1099R for conversion (do I get separate forms for 2021 and 2022 contributions, or are they grouped into one? But that is a question for later). If I get the recharacterization forms in 2023, how do I enter the relevant information into the tax filing for 2021 year? I didn't get any forms from Fidelity, so while I did initially contribute 6000, idk how much was recharacterized to trad IRA at that moment (I had to rechar 2 contributions - 2021 and 2022 - and they occurred on different days)