dmertz
Level 15

Deductions & credits

It's not clear from your question whether you unsure if you should make any IRA contribution at all or if you intend to make an IRA contribution but are unsure of which type of IRA should receive the contribution.  The benefit of making the IRA contribution for the current year is that it's an opportunity to ultimately get more money into a Roth IRA where it can grow nontaxably.  Failing to make the IRA contribution for the current year would be an opportunity lost.  Assuming that you are eligible to contribute directly to a Roth IRA (your modified AGI is not too high to do so) and you have no basis in nondeductible traditional IRA contributions, there is no real difference between contributing to a traditional IRA along with converting an equal amount to Roth in the same year and just contributing to a Roth IRA directly and not converting that amount.  The current-year tax liability would be the same.  Since you intend to convert other amounts anyway, it makes no difference at all, you'll just adjust the other amounts converted accordingly.

 

With Roth conversions, you'll generally want decline tax withholding on the conversion transaction and pay the tax with non-retirement funds, so as to maximize the amount that can be converted to Roth.