Question
Question on Form 8606 - failed Backdoor Roth due to income level & subsequent recategorization.
Hi all!
Client received 1099-R for $5,500 code 2 (x IRA) in 2021. Here is how he explains what happened:
"I figured I was not going to be able to get a Roth due to my income in 2021. So for almost the entire year I took funds from my checking account, deposited them into my traditional IRA, and then did the “back door Roth” to move the funds into my Roth IRA. The only month I failed to do that was in January 2021, hence why the 1099 is 5500 vs 6000. In January 2021 I didn’t do a back door Roth, I just deposited it straight into the Roth which is why I had to recharacterize the $500 a few weeks ago".
What should I do here? Should I fill out form 8606 as backdoor roth for $5,500 in part 1. What about part 2 of the form 8606?
Thanks a lot!
