Backdoor Roth

I've had a rollover traditional IRA for several years that has prevented me from using a backdoor Roth due to the pro rata rule. I learned that I could avoid the pro rata rule through rolling over my traditional IRA into my employer's 401K.

My only question is would I be able to open a backdoor Roth for tax year 2022 as I had the traditional IRA open during the same tax year? In that case I could do the transfer now (before April 15) and then do a backdoor Roth for tax year 2023. I wasn't sure about the time periods the pro rata rule considers.

Thanks so much for your help.

325

Employee Tax Expert

Mar 20, 2023 1:41:14 PM

Yes, you could make the nondeductible traditional IRA contribution for 2022 and then make the conversion in 2023. Just make sure that no pre-tax funds are left in the traditional IRA by doing the reverse rollover of the pre-tax funds to your 401k. When you convert the rest (your basis) in 2023 then the value should be $0 on December 31, 2023.

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Backdoor Roth