ThomasM125
Expert Alumni

Retirement tax questions

A backdoor Roth IRA conversion by itself would not have any tax consequences in the current year. You make a non-deductible contribution to a traditional IRA and then roll it over to a Roth IRA. It is done to allow someone who can't make a Roth IRA contribution because their income is too high to be able to do it.

 

I think you may mean you want to withdraw money from your 401-K plan and then transfer it to a Roth IRA. In that case, you would pay tax on the distribution amount and when you transfer it to the Roth IRA it would not be deductible.

 

If you are trying to save money in the current year, a contribution to a traditional IRA would be your only option, assuming you are able to do that since you have an employer plan. As such, it may be limited due to your income. You can open up the IRA with a bank or investment company.

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