In 2020, I deposited $7,000 (after-tax) in my Traditional IRA (Vanguard) account and then converted them into Roth IRA. One mistake I made was that for my age, the limit for backdoor conversion was $6,000 but I accidentally converted all of $7,000.
I have a couple of questions.
I received 1099R from Vanguard. Surprisingly, all of $7,000 was reported as Texable amount (Box 2a). How can I notify that I already paid a tax on $7,000 and $6,000 should be considered as backdoor conversion? Should I submit 8606? Or, should I contact Vanguard to amend 1099R?
For $1,000 which I accidentally converted beyond $6,000 limit, I guess it would be considered as early withdrawal. In that case, should I still pay a tax? Again, this was after-tax.
My CPA has no idea of how to handle this situation. I am trying to find an answer myself.
Key information from the comments:
Info on the 1099-R. Box 1 and Box2a has $7,000.09. Box 7(Distribution code) is 02. Box 2b (Taxable amount not determined and Total distribution) is checked. IRA/SEP/SIMPLE box is checked. Other than them, the others are empty.
I just checked my vanguard account. For 2019 tax year, there is indeed form 5498. It says $1,000 contribution. It was non-deductible and I didn't file Form 8606
One thing I found is that I made the non-deductible contributions in the following dates in 2020 -- $1,000 (Jan 16) and $6,000 (Oct 28~Nov 20) I immediately did a conversion to Roth IRA after each contribution.