Question on Non Deductible IRA's of $7K for Married Filing Jointly

[cippy1025]

Background

We are in the process of filing our 2020 tax Returns on Turbo Tax as as Married filing Jointly. We do not qualify for any deductible IRA given our income. We both are making a $7,000 Non-Deductible IRA for the Tax year 2020 ( IRA's will be opened in February 2021 before we file our actual Tax Returns for 2020). Our Goal is to make the Non-Deuctible IRA contribution's and then immediately convert it into a Backdoor Roth IRA.  

Questions

1. Will Turbo Tax will generate a 8606 for the Tax Year 2020

2. When I do receive a 1099-R from Fidelity in Feb 2022, will that have to be filed for the 2021 Tax Year

3. How will the IRS match the 2020 Non-Deductible IRA (Form 8606) in my 2020 Tax Return against the 2021 Tax Return where I will   be inputting the 1099-R from Fidelity. 

I plan on doing this every year (Contribute to a Non-Deductible IRA for the previous year and then immediately convert it to a Roth IRA  in Q1 of every year going forward) so I wanted to fully understand the Form Flow so that I can track it properly and not make a mistake in Turbo Tax. 

Thank you in advance

[dmertz]

1. Yes, TurboTax automatically generates Forms 8606 for reporting nondeductible traditional IRA contributions and Roth conversions that are entered.
2. No.  The Form 1099-R reporting the distribution from the traditional IRA that you will have converted to Roth in 2021 is reportable on your 2021 tax return.
3. 2021 TurboTax will prepare 2021 form 8606 Part I to calculate the amount that is taxable on your 2021 tax return, taking into account your basis in nondeductible traditional IRA contributions made for 2020 carried over from line 14 of your 2020 Form 8606.  TurboTax will also prepare Part II of the 2021 Form 8606 to report the Roth conversion