Contribute to traditional IRA (and converted to roth IRA) after 12/31?

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uniquegino
uniquegino Member Newcomer

Hi there, I created my traditional and roth IRA this month, and contributed $6,500 for 2023 to traditional first, and then convert all to roth (once the money is available, so it did not trigger any interest). My question is to my understanding, I should put No to all the 3 questions for my IRA. Then, does it mean it wouldn't make any difference on my 2023 tax return, comparing to not having traditional/roth IRA, since I only contributed to 2023 during 2024?

A followup question, if my understanding is right, next year when doing 2024 tax return, shall I answer Yes, No, No to the 3 questions, and put Enter any traditional IRA contributions you made during 2023: $13,500 and Enter any Roth IRA contributions you made during 2023: $0, if I am able to do clean backdoor like this time?

Thanks!

Did you contribute to an IRA?- Tax Help   

2023 IRA Contributions- Tax Help   Do NOT enter your 401(k) or 403(b) contributions as an IRA contribution.- Tax Help   

 Yes  

 x No  

Did you make any traditional or Roth IRA contributions during 2023?
You can make 2023 contributions until April 15, 2024.

2022 Excess IRA Contributions

 Yes  

 x No  

Did you have excess traditional IRA contributions in 2022 reported on Form 5329, Line 16 and owe additional tax on Form 5329, Line 17?- Tax Help   
(not common)

 Yes  

 x No  

Did you have excess Roth IRA contributions in 2022 reported on Form 5329, Line 24 and owe additional tax on Form 5329, Line 25?- Tax Help   
(not common)

Best Answer

  • Henry
    Henry FreeTaxUSA Agent
    Answer ✓
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    Hi uniquegino, if you designated your contribution as being for 2023, it needs to be reported on your 2023 tax return. You can do this by selecting Deductions/Credits>Common Deductions/Credits>IRA Contributions from the menu bar. In this situation, you would generally answer YES to that first question when asked if you made any traditional or Roth IRA contributions during 2023 (since you can make 2023 contributions until April 15, 2024). Then enter your contribution amount in the field provided for 2023 traditional IRA contributions. Form 8606 will automatically generate if you made nondeductible IRA contributions.

    Then, next year when you receive the 1099-R, you will report the conversion on your 2024 tax return and include the nondeductible contribution you made this year on the Traditional IRA Basis and Value screen where it will ask, "Enter
    total basis, if any, in traditional IRAs for 2023 and earlier years:" This will subtract the basis (your contribution this year) from the conversion amount.

    When it comes to entering your IRA contributions on your 2024 tax return, you will come to the question that asks if you made any traditional or Roth IRA contributions during 2024. You should only answer YES there if you made additional contributions that were designated as being for 2024.