I need some advice on how to handle my situation:
In mid Jan 2023 I transferred $6500 post-tax money to a traditional IRA (SPAXX - Fidelity Government Money Market) and converted entire amount to Roth IRA (back door) a few days later. At Jan end, I received $5 of dividends in my traditional IRA. I didn't touch that $5 for the entire year.
Today(Jan 1 2024) while browsing online I suddenly realize that that $5 balance in my traditional IRA may complicate future conversion/tax. What would be the best course of action now? I intend to do the Traditional IRA to Roth backdoor conversion soon for the maximum amount allowed by IRS in 2024 ($7000), should I transfer $7000 post-tax money to my traditional IRA and convert the $7005($7000+$5) to Roth IRA? Or should I transfer $6995 post-tax money to traditional IRA and convert $7000($6995+$5) to Roth IRA? Or is there another better option? And how should I handle my 8606 for 2023?
Thanks so much!
