Backdoor Roth Conversion - Multiple Years

Forum|Forum|5 years ago
January 27, 2021
1 reply
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I forgot to do my backdoor Roth conversion last year. I had an existing Vanguard Traditional IRA with $1.85 in it. Last week I contributed $12K (after tax money) from my brokerage account into it, specifying to put $6K in 2020 and $6K in 2021. A few questions:

1) When I try to convert to Roth IRA, it doesn't let me specify years. Because I did that when I first contributed, can I convert the whole thing without worrying about exceeding any yearly limits?

2) If yes above, will the $1.85 matter, or should I specifically convert exactly $12K?

3) Any tax forms to file? I believe I've been told I need an 8606. Any others?

4) Would I report is as part of my 2020 taxes, or 2021?

5) Any deadlines I need to know about other than 4/15?

Any guidance would be greatly appreciated!

Not A Product Question

Best answer by dmertz

Expert Reviewed

Any Roth conversion done in 2021 is reportable on your 2021 tax return, not on your 2020 tax return. Nothing about the Roth conversion goes on your 2020 tax return. Only the 2020 traditional IRA contribution goes on your 2020 Form 8606 and the resulting $6,000 on line 14 will carry forward to line 2 of your 2021 Form 8606 to be combined with your $6,000 contribution for 2021 and where the calculation of the taxable amount of your 2021 Roth conversion will be calculated.
If you convert $12,001.85 in 2021, that's what will go on line 8 of your 2021 Form 8606.
Your 2020 Tax return must include Form 8606 to report the $6,000 nondeductible contribution that you made for 2020.
See above.
No. You've already made your 2020 contribution before the 4/15/2021 deadline.

dmertzAnswer

Level 15

Expert Reviewed

Any Roth conversion done in 2021 is reportable on your 2021 tax return, not on your 2020 tax return. Nothing about the Roth conversion goes on your 2020 tax return. Only the 2020 traditional IRA contribution goes on your 2020 Form 8606 and the resulting $6,000 on line 14 will carry forward to line 2 of your 2021 Form 8606 to be combined with your $6,000 contribution for 2021 and where the calculation of the taxable amount of your 2021 Roth conversion will be calculated.
If you convert $12,001.85 in 2021, that's what will go on line 8 of your 2021 Form 8606.
Your 2020 Tax return must include Form 8606 to report the $6,000 nondeductible contribution that you made for 2020.
See above.
No. You've already made your 2020 contribution before the 4/15/2021 deadline.

Phobia42Author

Level 2

Thank you for the detailed response! So if I go ahead and convert the whole thing now, and report as you outlined, I should be safe from any kind of over-contribution penalties or anything, right?