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Backdoor Roth after the year end

nmr12354
Level 3

Taxpayer made a $7000 non deductible contribution to her Regular IRA for 2020 but forgot to move it to her Roth by the end of the year. Can the taxpayer still do the back door Roth as long as she hasn't filed her tax return? 

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qbteachmt
Level 15

"If converted now, can it still go on the 2020 return. Provided the mutual fund company can send a 1099R for 2020"

No and no.

It would be taxable in 2021, reported on a 1099-R for 2021.

You have the calendar year to take these actions. You have to the tax return filing to make contributions. Two different types of tasks.

*******************************
"Level Up" is a gaming function, not a real life function.

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qbteachmt
Level 15

There's nothing special about this. Let's review:

A Backdoor Roth is for someone who cannot contribute to Roth directly, so they make a Nondeductible Traditional IRA contribution, with the intent to Convert right away. As long as they have no basis in this or any other deferred account (per the IRS conversion table), then there is no income tax owed on a direct conversion. Because conversions are pro rata.

Not doing it timely is the same as having basis; there might be earnings that will be subject to taxes, now, because they were earned in a tax deferred account.

*******************************
"Level Up" is a gaming function, not a real life function.
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nmr12354
Level 3

If converted now, can it still go on the 2020 return. Provided the mutual fund company can send a 1099R for 2020

 

 

Thank you for your information.

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qbteachmt
Level 15

"If converted now, can it still go on the 2020 return. Provided the mutual fund company can send a 1099R for 2020"

No and no.

It would be taxable in 2021, reported on a 1099-R for 2021.

You have the calendar year to take these actions. You have to the tax return filing to make contributions. Two different types of tasks.

*******************************
"Level Up" is a gaming function, not a real life function.

View solution in original post

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