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Backdoor Roth question - a couple pennies earnings in my tIRA now

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  • Backdoor Roth question - a couple pennies earnings in my tIRA now

    Hello all,

    I had funded my tIRA the other week. Days turned into a week, a few things slipped my mind and now my tIRA has earned 2 cents of interest. In converting to a Roth, do I convert the whole amount with the 2 cents? Do I leave it in the tIRA and get taxed on the 2 cents?

    Thanks ahead of time!

     

  • #2
    Here's my 2 cents...

    You can choose whichever you want and it won't make a lick of difference. By the way, the IRS doesn't require entity reporting for income < $10.

    The bigger issue is administration - will the 2 cents allow you to keep the account open? Better to not have to open a new account every year. If the 2 cents is enough to keep the account open, leave it there. Even add a dollar if that's what is required.

    Don't forget to file your form 8606.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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