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  • ROTH question

    Graduating resident starting attending job in July. How would a ROTH contribution now while on a residents salary be treated at the end of the year if I end up over the income limit by the end of the year with increased income from new job? Would be a 2018 contribution as 2017 fully funded already

  • #2
    If you end up over the income limit, you will have to remove the contribution before 1/15/19, pay taxes on any growth, and use the backdoor Roth maneuver. If you are afraid you might end up in that situation, better to skip the direct Roth contribution, contribute to a TIRA now and then convert to a Roth. This assumes you have no pre-tax TIRAs in your name, though. If you do, you will be subject to the pro-rata rule,  and pay tax on all or part of it.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3




      Graduating resident starting attending job in July. How would a ROTH contribution now while on a residents salary be treated at the end of the year if I end up over the income limit by the end of the year with increased income from new job? Would be a 2018 contribution as 2017 fully funded already
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      Half your resident's salary plus half of your annual attending salary will be your 2018 income.  If that's possibly going to be over the Roth phaseout threshold ($125,000 single, $189,000 married joint), then just do backdoor Roth from the get-go.  Re-characterizing and doing backdoor is a pain.

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