@LLC3 wrote:
If the person is unaware of the procedure you described above and did steps 2 and 3 without completing step 1 for one year (total contribution $6500x2), how much taxes that person needs to pay for this action? Thank you!
You will have to provide more details. How do you contribute $6500 x 2, is that for two years of contributions, or IRAs for two different people (such as spouses)? An IRA is an individual account, and each person is considered separately. 401(k) funds that belong to you can only be rolled over to an IRA that you own, and can only be rolled into a 403B at your new employer. That won't have any interaction with your spouse's IRAs.
It is not completely necessary to complete the steps in the order I gave, that's just the easiest way to explain it. The key fact is that for a "backdoor" Roth conversion to work, the combined balance of all your traditional IRA accounts should be zero on December 31 of whatever tax year we are talking about.
What exactly did you do and when? What steps and in what order?
