@DanaB27
Again much thanks. Confirming, you said “The 6% penalty for 2024 is calculated as the smaller of the excess contribution or the value of your Roth IRAs on December 31, 2024 (including 2024 contributions made in 2025).” – with my excess 2022 contributions 0 (already gone by this time), and 2024 contribution through backdoor conversion $8000 (between 4/16/24 – 4/15/25), so the 6% penalty would be calculated based on the smaller 0. If so, my eligible contributions would not impact this calculation for 2024.
Backing up one year, since I am trying to clean and restart my Roth at this moment. I already contributed on 4/9/24 non-deductible traditional IRA, trying to convert backdoor to Roth by 4/15, so as to be treated as 2023 contribution/conversion. With this 2023 conversion, how would 2023 penalty be calculated? On top of “entering the excess contribution for prior years in the IRA contribution section”, do I also enter contribution for current year 2023 in the IRA contribution section? If so, does that change the penalty?
I suspect I’ll have to leave the backdoor conversion for 2024 return, then my 2024 1099-R would contain a) withdraw for prior contribution b) 2023 contribution through backdoor conversion and c) 2024 contribution through backdoor conversion, but that should not lead to more penalty for 2024. Is that right? I can’t thank you enough.
