Roth and backdoor roth deadline

[Opus 17]

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@anbuitachi wrote:

I see. So this means later down the line if i have lets say 30000$ in traditional IRA. I can roll all of it to roth at once?

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A rollover from a traditional IRA to a Roth IRA is also called a conversion.  You can do this at any time, with all or part of your IRA balance.  The conversion will be reported on a 1099-R as of the date it actually happens, conversions can't be back-dated like contributions sometimes can be.

If the original contributions to the traditional IRA were all tax-deductible when made, then the Roth conversion amount (contributions plus earnings) is subject to regular income tax.  If all the original contributions to the traditional IRA were non-deductible when made (and documented on form 8606 as part of your tax return) then the Roth conversion (contributions plus earnings) is non-taxable. 

Where you get into trouble with a "backdoor" Roth conversion is if part of your traditional IRA contributions were tax-deductible and part were non-deductible.  And all your IRAs are counted together for this purpose, meaning that if you had a traditional IRA with Merrill Lynch that was deductible, and a traditional IRA with Fidelity that was made with non-deductible contributions, the IRS will still consider that you have one combined IRA balance that is partly deductible and partly non-deductible.  I don't know if that is your question here, so I won't go into detail, but we can explain if you want more information. 

[anbuitachi]

Thanks. Sorry some of the replies are bit difficult for me to understand since I am not well versed in tax stuff and certainly not with Roth related. 

What I meant is if all my traditional IRA is non tax deductible. Will I be able to convert all of that to Roth even if its over 6000, or am I still limited to the 6000 a year. So If lets say in 2021 and 2022 I contribute 6000 each to traditional IRA for total of 12k. In 2022 can I then convert all 12k to Roth? Or can I only convert 6000 per year so I would have to do it in multiple years if I want to convert it all

[dmertz]

You can convert as much as you want in any given year, except that any RMD must be satisfied first before converting any part of what remains.  If you have not yet reached the year for which you are first required to take RMDs and your traditional IRA balance is less than or equal to your basis in nondeductible traditional IRA contributions, there is no reason not to convert it all immediately.

[Opus 17]

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@anbuitachi wrote:

Thanks. Sorry some of the replies are bit difficult for me to understand since I am not well versed in tax stuff and certainly not with Roth related. 

What I meant is if all my traditional IRA is non tax deductible. Will I be able to convert all of that to Roth even if its over 6000, or am I still limited to the 6000 a year. So If lets say in 2021 and 2022 I contribute 6000 each to traditional IRA for total of 12k. In 2022 can I then convert all 12k to Roth? Or can I only convert 6000 per year so I would have to do it in multiple years if I want to convert it all

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There is no dollar limit to the amount you can convert at any one time or in one year.

[BRENDASLEE]

So if am understanding this correctly, the non-deductible contribution I made to an IRA in February 2022 for tax year 2021 will show up on my 2021 tax  return.  I immediately converted it to a Roth IRA in February 2022.  Even though the non-deductible IRA contribution will show up on my 2021 tax return, the conversion will appear on my 2022 tax return.  Is that correct?

[dmertz]

Yes, that is correct.  The amount from line 14 of your 2021 Form 8606 will carry forward to line 2 of your 2022 Form 8606 to be included in the calculation of the taxable amount of your 2022 Roth conversion.