Recharacterization of Roth IRA to traditional IRA then backdoor Roth IRA + 401K rollover

[acandero]

Timeline:

1. I mistakenly contributed $2236 to my Roth IRA in 2022 not realizing my MAGI exceeded the annual limit.
2. I recharacterized the full $2236 amount in 2023 as a Traditional IRA ($2223 actually got transferred), and then converted $2246 back to a Roth IRA in 2023. At the time of conversion, I had no pretax TIRA balance.
3. In 2023, I also did a rollover from an old 401K plan to my new brokerage account where some funds will roll into a Roth, and some will roll into a Traditional account.
   
   1. Keeping in mind the Pro Rata rule for the Backdoor conversion, I intend to roll these funds to my new 401K plan to keep my Traditional IRA account empty. 

I'm assuming in 2024 I will receive 4 1099-R's documenting:

1. Backdoor conversion from Traditional IRA to Roth IRA
2. Recharacterizing the Roth IRA to Traditional (this information will be documented in an explanation statement in my 2022 tax return).
3. Rollover from 401K to Roth IRA
4. Rollover from 401K to Traditional IRA

Questions:

1. How do I report this accurately on my 2022 return?
   1. I assume I enter the $2236 contribution to my Roth IRA on my 2022 tax return and denote that it's a recharacterization + provide explanation statement.
   2. For my 2022 return, do I also need to file a Form 8606 to report the $2236 non-deductible traditional IRA contribution? Given that the conversion happened in 2023, do I also report the conversion on my 2022 tax return? Do I report the 2023 401K to IRA rollover on this form?
2. How do I report this accurately on my 2023 return?
   1. I assume I enter information from my 1099-R to report the rollover back to Roth IRA.
   2. For my 2023 return, do I need to file a Form 8606 to report the conversion? Do I report the 2023 401K to IRA rollover on this form? 

[dmertz]

Q-1:  Correct on both parts 1 and 2.

Q-2:  Correct on both parts 1 and 2.  Because the rollover from the 401(k) means that you will have a nonzero balance in traditional IRAs, your Roth conversion of the recharacterized funds will be partially, perhaps mostly taxable, calculated on your 2023 Form 8606.  The relative timing of this Roth conversion and the rollover from the 401(k) to the traditional IRA is irrelevant.  Nothing about the rollovers themselves from the 401(k) to the traditional and Roth IRAs goes on Form 8606.

If the rollovers from the 401(k) to the traditional and Roth IRAs came entirely from the traditional account in the 401(k) and were both direct rollovers, you'll receive only one Form 1099-R for the combined amount of the distributions that you will need to split into two for entry into TurboTax because TurboTax only allows for the designation of one type of receiving account for any one 1099-R.

[acandero]

@dmertz This helps, but I do have a few more clarifying questions:

1. Given that the conversion happened in 2023, wouldn't I report the conversion on my 2023 tax return via Form 8606? 
2.  You said, "Because the rollover from the 401(k) means that you will have a nonzero balance in traditional IRAs, your Roth conversion of the recharacterized funds will be partially, perhaps mostly taxable, calculated on your 2023 Form 8606."
   1. Wouldn't I just be taxed on the ~$10 earnings of gains that occurred by leaving the recharacterized money in the traditional IRA before converting back to Roth?
   2. To make sure my Traditional IRA account balance is empty, the rollover from the 401(k) to the traditional and Roth will soon be re-rolled into my new employer 401(k) plan to ensure the pro-rata rule is being followed. If all my non-Roth IRA's are empty by year-end, wouldn't the pro-rata rule be not applicable?

Thanks again for all your help!

[dmertz]

1.  Yes.

2.  The prorating is based on your 2023 year-end traditional IRA balance.  Your year-end traditional IRA balance will be reduced by whatever amount of your pre-tax funds you roll over to the new 401(k) before year-end.  The rollover to the 401(k) must come entirely from pre-tax funds in the traditional IRA (including, perhaps any earnings in the traditional IRA).  After-tax funds are not permitted to be rolled over to the 401(k) (nor would you have reason to do so).  Prorating is still done, but with a year-end traditional IRA balance of zero the calculation results in all of your basis being applied to the Roth conversion (unless the amount converted is less than your basis in nondeductible traditional IRA contributions due to any net investment loss that occurs after the rollover to the 401(k)).