I did a backdoor Roth conversion mid year 2020 for dollars that were contributed in 2019. In December of 2020 I made another non-deductible contribution to my Traditional IRA with the intent to convert it right away. I forgot to convert it and now we're in 2021. How does the pro-rata rule affect me now if I convert my December 2020 contribution? I plan to do another backdoor roth conversion in 2021 which means I'll be converting 120000, 6k from December 2020 and 6k from a contribution made in 2021.
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If you only had made nondeductible contributions to the traditional IRA then only the earnings will be taxable when you convert it to a Roth. Each conversion will have an amount allocated to the nondeductible part and the earning part. Since you are planning to convert all funds in 2021, the 12k will be not included in the taxable income but any earnings will be included.
Please follow these steps to enter your nondeductible contribution on your 2020 return (you should have done this on your 2019 return as well to create Form 8606):
To enter the 1099-R distribution/conversion 2020:
You will repeat these steps on your 2021 return when you convert the 12k.
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