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  • Backdoor roth

    Hello everyone!

    Is it too late for me to open TIRA, Roth IRA and do the conversion ? How long does the process take typically? I will be doing this at Schwab. Does it make sense to do a backdoor roth just this once given that it may not be allowed from next year? Please advise .

    Thank you !

  • #2
    Do you mean for 2021 or 2022? You should have until tax day 2022 to do your 2021 contribution, though it would be cleaner if you did it by December 31, 2021. Probably not too late. Usually takes a week. Yes it makes sense. I assume you have no other IRA balances. Remember when the cash hits your TIRA make sure it's not invested and rather goes into a money market account so you can convert $6k rather than some lower or higher number

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    • #3
      Originally posted by JBME View Post
      Do you mean for 2021 or 2022? You should have until tax day 2022 to do your 2021 contribution, though it would be cleaner if you did it by December 31, 2021. Probably not too late. Usually takes a week. Yes it makes sense. I assume you have no other IRA balances. Remember when the cash hits your TIRA make sure it's not invested and rather goes into a money market account so you can convert $6k rather than some lower or higher number
      Yes for 2021.. Thanks for your answer!

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      • #4
        Note: While you have until 4/18/22 to make an IRA contribution. Both the non-deductible traditional IRA contribution and Roth conversion must be completed by 12/31/22. If the proposed BBB elimination of Roth conversions of non-deductible basis takes effect on 12/31/22.

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        • #5
          Originally posted by JBME View Post
          make sure it's not invested and rather goes into a money market account so you can convert $6k rather than some lower or higher number
          I don't know why this is often stated.

          If it loses money you just have retained basis when doing an in-kind conversion at the same custodian. Sure you are subject to ordinary income taxes on any balance increase before conversion. Isn't it still worth it.

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