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Pro rata problem?

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  • Pro rata problem?

    Hello all,
    I’m in the process of completing my first (and hopefully not last) back door Roth IRA contribution for my IRA and a spousal IRA.

    My spouse has a traditional IRA with vanguard that we rolled over to her employer 403b earlier this month to avoid the pro rata rule. The vanguard account shows 7 cents remaining in the account as part of a sweep. According to customer service this will be cleared out sometime in the near future. I was also told any contributions within 60 days would be sent out to the 403b so I should not make any traditional IRA contributions for the back door roth until after a 60 day waiting period.

    1) has anyone else had this issue with remaining funds after a rollover out of a vanguard traditional IRA?
    2) do I really have to wait 60 days before making post-tax traditional IRA contributions?

    I’m nervous about delaying this too far into 2022 and coming close to the tax deadline as well as any pending legislation that may make this more complicated.

    any insights would be appreciated

  • #2
    Not a VG customer but if #2 is true (CSR don’t always provide correct info) that sounds like a stupid internal VG rule. It’s certainly not an IRS regulation. If you’re not married to VG and want to contribute to a 2021 BDR in less than 60 days consider opening another tIRA account somewhere else like Fidelity, Schwab, ETrade, TDA, etc. Roth IRA too if you want to make BDR conversion really simple.

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    • #3
      IRS forms round to nearest dollar. So 7 cents becomes zero. Non issue

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