Excess contribution and Backdoor Roth conversion in same year

Forum|Forum|5 years ago
March 8, 2021
1 reply
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Hi there,

I'm looking to make a non deductible contribution to a traditional IRA and then convert it to a Roth IRA, since I exceed the income thresholds. However, there was an excess contribution earlier this year in a prior Roth IRA (not my fault, the IRA provider moved the money to the wrong account). It's since been corrected and the Roth was closed.

However, now that I want to do a backdoor Roth, having just recently learned about them, is it going to cause any IRS issues that I'm opening a new Roth in the same year, since I previously had an excess contribution in the old Roth? This would be a new Roth with the same IRA provider.

Thank you!

Not A Product Question

Best answer by macuser_22

Then it should not cause any problem.

macuser_22

Alumni - Champ

@marychris wrote:

Hi there,

I'm looking to make a non deductible contribution to a traditional IRA and then convert it to a Roth IRA, since I exceed the income thresholds. However, there was an excess contribution earlier this year in a prior Roth IRA (not my fault, the IRA provider moved the money to the wrong account). It's since been corrected and the Roth was closed.

However, now that I want to do a backdoor Roth, having just recently learned about them, is it going to cause any IRS issues that I'm opening a new Roth, since I previously had an excess contribution in the old Roth? This would be a new Roth with the same IRA provider.

Possibly.

Where was the money moved to? What type of account?

**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.**

marychrisAuthor

Level 2

Originally, the money was transferred from my bank to the Roth instead of from the bank to my HSA, as I had wanted to make an HSA contribution. I called the provider as soon as I saw the money had hit the Roth and had the money returned back to my bank account after completing the excess contribution form.

macuser_22

Answer

Alumni - Champ

Then it should not cause any problem.

**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.**