Hello,
I have an existing Roth created long ago. However, I am no longer able to contribute due to income limits. (I haven't done so last couple of years). However I am now planning to contribute via the backdoor option. I want to do so for 2024 and 2025. So here is my plan to accomplish this (my question is at the end)
1. Create a new Trad IRA account (I dont have any existing Trad IRA)
2. Deposit non-deductible amount to Trad IRA for Tax Year 2024.
3. Wait for amount to "settle"/be cleared.
4. Rollover the entire amount to the Roth IRA for Tax Year 2024.
Repeat Steps 1 thru 4 for Tax year 2025.
Questions that I have:
1. Can I rollover now in March 2025 (towards tax year 2024) and then again do this in March or April for Tax year 2025? I am concerned about the "one rollover per year allowed", is this per calendar year? per tax year?
2. Do I need to create 2 new Trad IRA account to do it once for Tax Year 2024 and then for Tax Year 2025? Or can I just use the same traditional IRA for 2025 (it will be empty, since I would have rolled over the 2024 amount into the Roth IRA).
Thanks a ton for this online community!
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1. Transferring your funds from a traditional IRA to a Roth IRA is a conversion, not a rollover. There's no limit on the number of conversions you can do each year, so your method would be fine. However, you don't need to do the conversions separately. You can make your nondeductible contributions for each year, and then convert the total at once.
2. You can use the same traditional account for your 2024 and 2025 contributions as well as future contributions.
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