Retirement tax questions

You and your wife?

 

IRA accounts are Individual.    What you do with your 401(k) or IRA has nothing to do with your spouse.

 

For a backdoor Roth to work, your IRA (that is the aggravate value of all Traditional, SEP and SIMPLE IRA accounts) must have a starting value of zero and year end value of zero.

 

If you have a current Traditional IRA the  it is possible to roll that into a 401(k) (provided that the plan permits that) in order to make the IRA value zero.    Then make a non-deductible contribution to the Traditional IRA and immediately have that converted to a Roth IRA before it can have any earnings or *losses so that the IRA value again is zero at year end.  Keep good records to show the dates and 401(k) plan deposits should the IRS questions  it.  The 401(k) plan does not report rollovers to the IRS so it is up to you to have the records to prove the dates of the transactions and IRA value.

 

*A loss for the year would complicate the 401(k) rollover in the same year.  It is best to avoid any gain or loss by converting ASAP after the contribution.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**