As far as mixing deductible and non-deductible funds.
If you've been doing that for "years" you are kind of stuck with that situation. Your traditional IRA has a mix of contributions that were never taxed (because they were deducted) and contributions that were already taxed (non-deductible). However, the entire amount you withdraw from a traditional IRA when you retire is taxable, even though you already paid tax on part of your contributions. To not pay tax on the non-deductible contribution, you need to keep track of the non-deductible contributions on form 8606, and keep the most recent form 8606 for the rest of your life, or until the next year when you make a non-deductible contribution. The IRS won't allow you to claim part of your withdrawal as tax-free unless you have the 8606 to prove it, they don't keep track for you.
When you withdraw, you use form 8606 to avoid tax on part of the withdrawal. Suppose your balance is $100,000, of which $20,000 was deductible contributions, $10,000 was non-deductible contributions, and $70,000 is growth. You withdraw $5000. Because 10% of your balance is from non-deductible contributions, 10% of the withdrawal is non-taxable. That also reduces your non-deductible basis by $500. Then the next year, if the account is worth $105,000 due to growth, but your non-deductible basis is $4500, 4.28% of your withdrawal is non-taxable. And so on and so on. A tax program will do the math for you, but you have to keep copies of the 8606 forms for as long as you have money in an IRA, and should not discard them after 3 or 6 years which is the usual advice for most tax papers.
And it makes it much harder to do Roth IRA conversions.
As far as reversing a contribution:
You said that you rolled over the 401k to a traditional IRA, and you also contributed $200 of non-deductible funds. You can't reverse the rollover. That's done. but you could reverse the $200 contribution, if I understood your statement correctly.
But that may be pointless if your traditional IRA already mixes deductible and non-deductible contributions.
If you were in a situation where all your traditional IRA funds were deductible, adding $200 of non-deductible contributions creates an unnecessary complication of needing form 8606 and having to track the basis for the rest of your life. But if you were already in that situation, it doesn't change anything to add more pre-tax money by rollover. That's just something that will need to be reported and taken into account if you ever want to withdraw or convert the money.
"What will be the easiest way to handle this that I can max my contributions"
You can always contribute the maximum to a traditional IRA no matter your other income, you just might not be able to deduct it. If you are in the income range where a deductible IRA contribution is not allowed but a Roth IRA is allowed, it would be cleaner to contribute to a Roth IRA rather than make non-deductible contributions to a trad IRA. But since you already have mixed deductible and non-deductible contributions in a trad IRA, the benefits of keeping the non-deductible money in a separate Roth IRA are less than they would be for someone who hasn't mingled their funds.
