u/AI_FTW

Hi all, looking for a sanity check on my plan & understanding. Income is over the AGI limit for direct Roth contributions.

My situation:

• Opened a Traditional IRA (non-deductible contributions since I'm over the AGI limit)
• Contributed $6,500 in 2024 for tax year 2023
• Contributed $7,000 + $7,000 in 2025 for tax years 2024 and 2025
• Total contributions (cost basis): ~$20,500
• Current approximate value: ~$39,770
• I want to make my 2026 contribution of $7,500

My plan:

Rather than deal with the pro-rata rule on an ongoing basis, I'm considering converting the entire Traditional IRA balance to a Roth IRA — the existing ~$39,770 plus a new $7,500 contribution for 2026, totaling ~$47,270. This "cleans the slate" so future backdoor Roth conversions are simple (contribute + convert immediately).

My understanding of the tax impact:

• Cost basis (non-deductible contributions): $28,000 ($6,500 + $7,000 + $7,000 + $7,500)
• Total conversion amount: ~$47,270
• Taxable portion: $47,270 − $28,000 = $19,270 (the gains)
• At the 24% marginal bracket: ~$4,625 additional tax for 2026 (due April 2027)
• All future growth in the Roth is tax-free, and I no longer need to track basis going forward

Forms involved:

• Form 8606 – Required to document that my contributions were non-deductible, so the IRS doesn't treat the full $47,270 as taxable
• 1099-R – Brokerage will issue this with Box 2a likely blank (taxable amount not determined), which is why the 8606 is critical
• Form 5498 – Brokerage sends for my records confirming the conversion

Am I getting all of this right? Anything I'm missing?

Also, according to a friend of mine, I should have been filing Form 8606 for each year I made a non-deductible Traditional IRA contribution (2023, 2024, and 2025 tax returns), which I did not. Is this a big problem? Do I need to amend my 2023, 2024 and 2025 tax returns? Will I be taxed twice?

Many thanks!