Question on backdoor roth late contribution & Back Door Timing question

[conniebird]

Q1: I have not yet contributed to 2015 Roth IRA. I am planning to do it in March, in time for the tax deadline. And will make my 2016 Roth contribution this calendar year.

 

Question - I read this post: https://www.whitecoatinvestor.com/late-contributions-to-the-backdoor-roth-ira/#comments

and WCI's original post on how to do a backdoor roth - it seems like I don't have to file anything for this late 2015 Roth contribution until 2016 taxes? Am I totally getting this wrong?

 

I may need to hire someone to help w taxes this year as I need to file in 3 states (moved last year, started new job, etc)- but may try to do it all myself in turbotax, but seems a bit daunting esp with this abck door roth stuff.

 

Q2: I have around $1,000 in an old plan that needs to be rolled over - I would like it rolled into my vanguard IRA so I can convert it to Roth (I only have a ROTH IRA at vanguard, no traditional IRA). I guess I need to time it so that once it gets to my vanguard account, I can immediately contribute the remaining $$ to get to $5500 and convert to Roth?

 

Thanks

[jfoxcpacfp]

Q1: Your Roth contribution is not "late" per se as you have until 4/18/16 to contribute. You'll contribute to the Roth for 2015 but your conversion will be for tax year 2016 as conversions are reported on a calendar year basis.

Q2: It doesn't matter where you roll your old plan $1k, you will still be able to back-door it to Vanguard, but I agree that it will likely be easier to stick with one custodian. The roll-out amount does not count toward your annual IRA contribution, however. You can still contribute the full $5,500 to your IRA and convert to the back-door Roth. The only timing issue that you need to concern yourself with at this point is making your 2015 IRA contribution by 4/18/16. As always, be sure to file your form 8606.

[Raj]

Question:

On a similar note, i have been doing roth IRA (myself + wife) for the last 2 years as a fellow. i maxed out Roth for tax year 2015 in december. As the market has been down i also started putting some money in for the 2016 tax year. However, i just realized, i will be working as an attending from july and my taxable income for the year 2016 is going to be >$200K. Is there anyway i can get the money back from the roth IRA for 2016 year? Now my plan is to do a backdoor IRA for tax year 2016.

Thanks!

[jfoxcpacfp]

@Raj - congrats on the "raise". All you have to do is to ask your custodian to re-code the contribution to a TIRA. You don't have to physically remove your contributions. Hope this helps.