New to backdoor IRA

[Kylejt]

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!

 

 

[Joseph]

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

[Kylejt]

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?

[Joseph]

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.

[jfoxcpacfp]

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.