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Backdoor Roth in Early Jan or wait to see if eliminated?

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  • Backdoor Roth in Early Jan or wait to see if eliminated?

    Looks likely with bipartisan support to eliminate on the finance committee that the Backdoor Roth's days are numbered.

    I usually do my annual backdoor Roth 1st week of Jan.

    Would be annoying to recharacterize and get stuck with a non-deductible IRA to track.

    If they do pass the law to eliminate in early 2017, is it likely to be retroactive and disallow conversions from earlier in 2017 or should I be safe?

    Anyone give this any thought?

  • #2
    Interesting q. Don't have answer but would imagine it would take longer than just a year? Are you reading something specific about bipartisan support to do away with backdoor? What are your sources?

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    • #3
      Agree with Caligirl - could you post some material? I cannot find anything current to support the statement that the backdoor Roth's days are numbered.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        It would be very unlikely that they would pass any such law with immediate effect - it would probably not go into effect until Jan 1 of a following year so as to avoid the chaos of undoing contributions/conversions.

        But yeah, links or it didn't happen.

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        • #5
          It is in the draft proposal of the RISE act which is high on the list of potential votes in the lame duck session.  A quick google search will let you read more if you are interested.  Obviously it may not happen or the final version of the RISE act may not include it, but when things get brought up repeatedly and there is not major resistance from either party, they tend to get slipped in.

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          • #6
            The RISE act is currently in draft format only...not even submitted to committee yet. Call me crazy, but the odds of it making it through committee, through a Senate vote, through House reconciliation and signed into law in a month is slim. I will worry about its implications if it ever becomes law.

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            • #7
              This link describes what I think the OP is referring to.

              http://www.plansponsor.com/Mega-Roth-IRAs-Target-of-Senate-Democrats-RISE-Act/

               

              Personally, I plan on still contributing the full amount in January.

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              • #8
                Do they often pass finance bills which take effect within a couple weeks? Even if it gets ramrodded through a lame-duck Congress, I'd think immediate effect to be unlikely.

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                • #9




                  This link describes what I think the OP is referring to.

                  http://www.plansponsor.com/Mega-Roth-IRAs-Target-of-Senate-Democrats-RISE-Act/

                   
                  Click to expand...


                  This article was published in September. The title refers to senate Democrats. At the time of writing, it was expected that we would have a Democrat in the White House with possibly a Democrat majority in one or both houses. Obviously, that did not happen, and I expect this is not an issue that is not going to be on the agenda for awhile.
                  Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                  • #10
                    I wouldn't be so sure. Last time elimination of stretch IRA came up for vote it passed GOP house and failed by 1 vote in senate, actually saved by senate Dems. I'm not sure that congressional republicans have much appetite to save maneuvers like the stretch IRA or backdoor Roth that many see as taking advantage of unintended loopholes. Hope not but could easily end up as part of tax reform package.

                    I'll probably do my backdoor Roth in Jan anyway.

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