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No, your Form 8606 seems correct if you had pre-tax funds left in the traditional IRA. Please be aware, if had pre-tax funds in your traditional IRA now the pro-rata rule applies. This means that with each distribution/ conversion, you will have a taxable and nontaxable part. You can see the remaining basis on line 14 of Form 8606, this basis can be carried forward. Therefore, each distribution/conversion in the future will have a taxable and nontaxable part until the basis is all used.
The Backdoor Roth only works if your traditional/SEP/SIMPLE IRAs are empty (don't have pre-tax funds).
Please see How to FIX Backdoor Roth IRA Screw-ups and When the Reverse Makes Sense: Benefits of a Reverse Rollover for additional information.
To enter the nondeductible contribution to the traditional IRA:
To enter the 1099-R conversion:
I'm sorry that I wasn't clear in my question. I contributed and converted $7k to my back door roth in 12/2022. I thought my tIRA was $0 but I got $2 of interest/dividends on 12/30/2022, so on 12/31/2022, I had $2 in my tIRA. I've spent hours trying to get my 8606 Form to show $7k instead of $6,998 and don't know how to make the change. Yes, I understand that I will have to pay pro rata taxes on the $2 that was in the tIRA on 12/31/2022. TIA.
Yes, you cannot change the $6,998 nontaxable distribution because the pro-rata rule applies. Part of your $7,000 basis will be applied towards the $2 left in the account. You can see the rest of your $2 basis on line 14 and you will be able to use it when you convert the $2 in the future.
Therefore, this conversion will have $2 taxable.
To verify your Form 1099-R was $7,000 and you entered the $7,000 nondeductible traditional IRA contribution.
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