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Backdoor Roth Funding Questions

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  • Backdoor Roth Funding Questions

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    Last edited by dentite21; 09-28-2021, 04:58 PM.

  • #2
    its more complicated but not overly complicated. this is why everyone says contribute and convert in the same year.

    do you have a 401k you can roll them into?

    otherwise yes for <5500, may as well convert and get it over with.

     

    think of this as good practice. a see one do one teach one approach.

    youre gonna have to do the 8606 every year anyways.

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    • #3
      My wife has a 401 K but I do not this year. I think we might just take the tax burden as we planned for it and do the indirect contribution.

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      • #4




        My wife has a 401 K but I do not this year. I think we might just take the tax burden as we planned for it and do the indirect contribution.
        Click to expand...


        well move hers then. no reason to pay unnecessary tax, ever.

        you dont have a workplace retirement account?

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        • #5
          I do have a retirement account from work but was not eligible until this coming year. I work for a small-medium group that is now offering a 401K (without match unfortunately). Many small "mom and pop" dental operations do not offer any benefits for associate dentists.

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          • #6
            I will look into the direct transfer for my wife's account - I know some companies allow the direct transfer and others do not. If they allow it, I will need to figure out what portion of the $5,500 which was contributed now exists (i.e. there is a loss in this traditional IRA account so it might be $4500 now). Any easy way to figure this out? Any other suggestions? Btw, you've been very helpful. Thanks!

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            • #7
              The pre-tax balance = total balance - non-deductible basis. If <= $0 there is no pre-tax that needs to be rolled over.

              In fact, any excess basis will remain on Form 8606 until used. If you have future pre-tax earnings, you can convert that up to the amount of the basis.

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              • #8







                My wife has a 401 K but I do not this year. I think we might just take the tax burden as we planned for it and do the indirect contribution.
                Click to expand…


                well move hers then. no reason to pay unnecessary tax, ever.

                you dont have a workplace retirement account?
                Click to expand...


                So to be clear, I am going to move the shares from my wife's 2017 traditional IRA to her 401K. We used this as a tax deduction for that year - does this still "qualify" as money that can be deposited into the 401K. It makes sense to me that it should be but I like to be safe.

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