Backdoor Roth & 401K to IRA conversion in same year.

[PN08]

I wanted the community advice on my 2022 and 2023 backdoor Roth conversion - which I believe may lead to a future tax bill as I did 2022 and 2023 Roth conversion on Jan 15, 2023 along with moving my pretax 401K to personal IRA in March 2023. 

I obviously did these without knowing the finesse of ProRata rule and seeking some help here. I am in my 30s and few decades away from retirement. 

My prior employer 401k (with >150K $$) had very limited investment options and had no dividend paying index funds or even low cost funds that will mimic growth of S and P 500. So to have better investment options, I moved my 401K to personal IRA in March 2023. 

But before that, I had done backdoor Roth for 2022 and 2023 in Jan of 2023. 

At that time, I wasn’t aware of the Pro Rata rule and implications of simply moving money from 401K to personal IRA. 

So I am seeking advice on a few things from this situation - 

- Do I get extra tax bill just for 2023 conversion or even 2022 backdoor conversion since done in year of 2023 gets taxed ?

- Are there any ways to prevent paying extra taxes (on 6500$ or $12500, if both years will be taxed)?
- Can I just convert all of my pretax traditional IRA (>150K$) to Roth and pay taxes for that? If yes, will it prevent extra taxes on backdoor conversion?

I may have some saved $$ but is it even possible to convert pretax IRA to ROTH IRA and does it even make sense to do it as the extra tax would be due on that will be a LOT). 

Thank for your help and guidance. 

 @dmertz 

[dmertz]

Both Roth conversions which were done in 2023 are taxable on your 2023 tax return.  Due to the rollover of the 401(k) to a traditional IRA, this balance in the traditional IRA will be included in the pro-rata calculation of the taxable amount of the Roth conversions.  The only way to avoid this would be if you could roll the traditional IRA over to a 401(k) or similar employer plan before the end of 2023 so that it would not be included in the year-end balance required on Form 8606 line 6.

See the following IRS information on underpayment of taxes to see if you might have to increase tax withholding or make estimated tax payments to minimize any underpayment penalty on your 2023 tax return:

https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty