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New to backdoor IRA

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  • New to backdoor IRA

    So I just completed a backdoor IRA through vanguard a few days ago.  I have $5,500 in the Roth IRA account, but I noticed that I have 16 cents in my traditional IRA account from dividends.  I don't know what I should do with the 16 cents or if it has other implications.  Any advice would be greatly appreciated!



  • #2
    It will be ok.  16 pennies looks like $0.  Next year you can include them all when you convert the 5500 again.


    • #3
      My previous $5500 was for 2015.  If I were to contribute and convert for 2016 in a few month I can just convert $5500.16 to the Roth account?


      • #4
        Yes, with the understanding that those 16 cents may fluctuate in value either up or down.  You will get a tax statement and be taxed accordingly.  I think you will be able to handle the consequences of it.


        • #5
          Or you can simply leave the account open with 16 cents in it as a placeholder and use that account as the flow-through account each year. Some brokerages might close a zero-balance account.

          Just re-read and saw you use Vanguard. I believe they allow zero-balance accounts.
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