Thanks for this answer. I do have a follow-up question that I asked the other reply as well. In my specific example there are a few rollovers happening but to focus on the simplest one;
- Contributed $6,000 cash to a traditional IRA in 2022
- Converted the $6,000 cash to a Roth IRA in 2022
- When I enter the 1099-R information for the $6,000 my federal tax changes by $1,733 (29%). This seems correct to me
- The next question as you point out is the nondeductible contributions. Would this $6,000 qualify as that? If not, I think I should be answering no to that question
- Either way, the the follow-up question is the outstanding balance of all traditional IRA's. When I input that value it impacts my federal taxes by another $1,999 which would be a total tax liability of 62% on the $6,000, which seems crazy
- If I just $0 for outstanding on traditional IRA that $1,999 goes away
So why is the tax impact going up based on remaining balance of traditional IRA that was not converted to Roth?
