Backdoor Roth IRA Mistake

[yfinkle]

I made a mistake and missed the point about the pro rata rule. In 2019 I contributed 6k (non-deductible) to IRA then converted that 6k to Roth soon after. I have 12k in another traditional IRA account. Based on the pro rata rule, the split will be 4k taxable and 2k (basis) non taxable. 

Now i need to fix it by rolling it over into my Employee 401k.

The dilemma here is I don't want to rollover my IRA basis (non deductible) money into the 401k, I want to convert that to a Roth so I don't have to deal with the tax situation of a 401k in the future or potentially get double taxed on the basis if I forget about it in 25 years.

Okay so I want to make sure I do it right now. Would the steps below work to satisfy the IRS?

1. Rollover 8 of 12k to my employer 401k, leaving the 4k on which I already paid taxes in the IRA.

2. Convert the 4k to Roth right away, this should not be a taxable event since I already paid taxes on this money right?

3. Move forward with backdoor Roth as usual?

[AmyC]

No. The $6k is in a Roth and it is done.  The IRS says:

You can roll over your IRA into a qualified retirement plan (for example, a 401(k) plan), assuming the retirement plan has language allowing it to accept this type of rollover. Roth IRAs can only be rolled over to another Roth IRA.

from  Retirement Plans FAQs regarding IRAs Rollovers and Roth ...

The pro-rata rule is the formula used to determine how much of a distribution is taxable when the account owner holds both after-tax and pre-tax dollars in their SEP, SIMPLE, and Traditional IRA(s). 

A ROTH IRA is NOT included in the pro-rata rule.

It sounds like you can roll the entire Traditional IRA into your employers 401k, unless there is information missing.