I joined a company that offers pension plan in 2020. In the same year, I made a traditional IRA contribution of $6,000 without realizing that I couldn't simultaneously participate in both a pension plan and contribute to a traditional IRA. Consequently, the $6,000 I contributed to the traditional IRA became a nondeductible IRA (after-tax) on my 2020 tax return. May I know
Is there a way to "convert" this $6,000 from a nondeductible IRA back to a traditional IRA without incurring any tax or penalty, provided I no longer make pension contributions? I am not yet at the retirement age.
Can I "rollover" this $6,000 nondeductible IRA (after-tax) from 2020 to 2023 as a traditional IRA (pre-tax) contribution? In other words, can I use the $6,000 contribution made in 2020 and "apply" it to 2023, so it appears as if there were no nondeductible IRA in 2020, but only a traditional IRA in 2023, providing pre-tax benefits in my 2023 tax return?
Your assistance is greatly appreciated!
That's too bad. Does that mean there are no alternative methods to transfer the nondeductible IRA into a traditional IRA without facing penalties and taxes?
There isn't a way to transfer the nondeductible IRA to a traditional IRA as it's already in a traditional IRA (but the basis is tracked since you weren't able to take a deduction in the year of the contribution).
If you want to make a deductible contribution for 2023, you will need to fund that with new money.