In my last year my text return (2021), I have IRA conversion to Roth IRA $46719.40 which include my $7000 after-tax money for which I intended to do the backdoor Roth conversion. But tax return gives $43540 as IRA distribution and only $46719-$43540 = $3179 without tax. The $7000 -$3179 = $3821 is double taxed.
Why did I get double-taxed? At beginning of the year 2021, my IRA account is empty and I add after-tax $7000 to IRA as a way to get to Roth of backdoor methods. Then I transferred that $7000 to my Roth IRA. Later in the year (I got laid off), I rollover my 401k to my IRA account (empty at the time). At end of the year, I converted $39719.40 to my Roth. So only my $39719.40 need to be taxed. I know later that I shouldn’t mix both pre-tax and after-tax money in my IRA account, I was taxed $43540, and the $43540 - $39719 = $3821 was double taxed.
However, my understanding is that my $7000 -$3179 = $3821 isn’t double taxed but it is left in my IRA account for the later tax credit. So, this year (2022) I converted all my IRA into my Roth IRA account and left my IRA account empty. I think in this way, I could get my $3821 credit back. Do you think my thought is right? If yes, could you give me advice on how to file the 2022 Tax Return next year to get my $3821 credit back?
Thanks so much! 😊
Jia
