Backdoor Roth Contribution for 2022 in 2023 Confusion

[postal007]

Hi all -- Long time lurker and first time posting for advice in this forum!

I've been doing backdoor Roth IRA contributions for many years on my account. We never did it on DW's account because she had a bunch of rollover money from an old 401(k) mixed with non-deductible contributions back when she was making more and before Backdoor Roths were allowed, and I never wanted to sort through it (kind of a mistake).

Last year I finally sorted out her non-deductible basis from old tax returns and memory, and rolled over the pre-tax into a non-prototype Solo 401(k) (DW has her own business now) and then did a non-deductible contribution (for 2022) into her Rollover IRA and did the backdoor to Roth IRA finally. So I thought we were in good shape -- her Trad/Rollover IRA now had $0 balance and she was all set up for 2023.

There was just one mistake -- I blanked on the contribution limit and only contributed $5000 last year, leaving $1,000 leftover for 2022. Thus, I want to contribute before April 15 this year for 2022 the remaining $1,000. I want to also contribute the maximum $6,500 this year for her and do the backdoor for 2023.

Any advice on how to do this, and whether there's any timing restrictions? Should I do the $1,000 contribution separately, distribute that over to the Roth first, and then do the $6,5000 after to keep things clean? Is there a danger to doing it this way on how to report on my taxes? I've only usually done same-year contribution and distribution so my TurboTax is easy, but not sure if I'm over-complicating it this time.

[tashnewbie]

Any advice on how to do this, and whether there's any timing restrictions? Should I do the $1,000 contribution separately, distribute that over to the Roth first, and then do the $6,5000 after to keep things clean? Is there a danger to doing it this way on how to report on my taxes? I've only usually done same-year contribution and distribution so my TurboTax is easy, but not sure if I'm over-complicating it this time.

You can make the $1k contribution for 2022 and make a $6.5k contribution for 2023, probably at the same time, depending on your brokerage. At Vanguard, I think I can designate how much money I want to transfer into the IRA and select how much is associated with each tax year. If your brokerage is different, then you can do a transaction for $1k for 2022 and then shortly thereafter do a separate transaction for 2023.

You can convert the funds all at once.

The associated Form 8606s will be slightly different from a situation where you do both steps of the backdoor in the same calendar year for that tax year.

For 2022: Part 1 of 8606 will look like this: Line 1 - $6k, Line 4 - $1k, Line 5 - $5k, Line 9 - $5k, so on and so forth.

For 2023: Part 1 - Line 2 will have $1k (basis from the contribution you made in 2023 for 2022)

I recommend filling one out for 2022 and 2023 by hand to practice and confirm you understand how to do it.