@mbtn wrote:
Thanks for the detailed response. I had read about paying the tax on any earnings. I mostly didn't have clarity of whether there would be an issue with doing the pair of contribution/conversions that close together.
Good thing to know about the 8606 forms.
No rules about closeness, although it may take a couple of days for each transaction to be processed by the broker. That's something you will watch for with them.
Something to be aware of with timing is that contributions can be retroactive, but conversions happen when they happen. So if you contributed $7000 on January 2, 2025, designated for 2024, and you converted it on January 3, and you contributed another $7000 on January 7, designated for 2025, and converted it on January 8, your 2024 tax return would only show a contribution; and your 2025 tax return would show a contribution of $7000 and a conversion of $14,000. This is perfectly ok, as long as you filed the 2024 return correctly with form 8606.
Otherwise, your tax return filed in 2025 will combine everything that happened between 1/1/24 and 12/31/24, and so on for 2025, 2026, etc.
