Hello,
I'm in a complex backdoor Roth IRA situation and was hoping for some help with Form 8606. The below timeline refers only to activities for the 2021 IRA (haven't contributed/converted anything in 2022 yet)
Activity timeline:
~January 2021: $6,000 direct Roth IRA contribution for 2021
~February 15, 2022: Recharacterized $6,900 (>$6,000 due to gains) to traditional IRA (due to change in filing status from MFJ to MFS for student loan purposes)
~February 20, 2022: Converted $6,750 (some losses between Feb 15 and Feb 20) back into Roth IRA (thereby completing backdoor Roth IRA)
Questions regarding Form 8606:
Line 4: Enter those contributions included on line 1 that were made from January 1, 2022, through April 18, 2022
Because I initially contributed to a 2021 Roth IRA in Jan 2021, but didn't recharacterize until Feb 2022.
Should this line be?
- $0 (because the date of recharacterization doesn't matter, only initial contribution date/amount counts for this line)
- $6,900 (because that is the amount that was recharacterized in Feb 2022)
Lastly, I did my very best filling this out on my own, could you please check the following for error?
Form 8606 for tax year 2021, here is what I think it should look like:
Line 1: $6,000
Line 2: $0 (I don't have any basis)
Line 3: $6,000 (Line 1 + 2)
--> then skip to Line 14 because I did not make a Roth IRA conversion during year 2021 (only in Feb 2022)
Line 14: $6,000 (same as Line 3)
Form 8606 for tax year 2022 (when I file next year, assuming I'll be doing another backdoor Roth IRA for 2022 by doing a nondeductible contribution of $6,000 during calendar year 2022, followed by conversion back to Roth IRA duringcalendar year 2022)
Line 1: $6,000
Line 2: $6,000 (my basis from last year)
Line 3: $12,000 (Line 1 +2)
Line 4: $0 (again assuming that for my 2022 IRA, I in fact contribute $6,000 during calendar year 2022, not after)
Line 5: $12,000 (Line 3 minus 4)
Line 6: $0 (since by December 31, 2022, I would have converted ALL my tIRA to rIRA, i.e. no pro-rata rule issues here)
Line 7: $0 (not taking any distribution)
Line 8: $12,750 ($6,750 converted on Feb 20, 2022 + $6,000 that will be converted this year when I do another backdoor Roth IRA (assuming no gain/loss between contribution/conversion)
Line 9: $12,750 (Line 6 + 7 +8)
Line 10: 0.941 (Line 5 / Line 9)
Line 11: $12,000 (Line 8 * Line 10)
Line 12: $0 (Line 7 * Line 10)
Line 13: $12,000 (Lines 11 + 12)
Line 14: $0 (Line 3- Line 13)
Line 15 a through c: $0
Line 16: $12,750 (from Line 8 )
Line 17: $12,000 (from Line 11)
Line 18: $750 (Line 16 minus Line 17)
Does this look right?
Thanks so much
