Hello, Would like to seek some advice for those who may have gone down this path before. I am late to the game of finding out about the "backdoor Roth IRA" and would like to know what is the best way to approach and get started. Here is my situation. - Existing Rollover IRA - From previous employer 401k plans. Insignificant balance of about $10k. - Existing Roth IRA - Newly created Traditional IRA - I am above the standard Roth IRA contribution limit, hence looking at the backdoor Roth IRA - Presume I am at a tax bracket where the $10k would not push me into another tax bracket (irrelevant for me) It is now January 2020, I would like to ideally fund before April so that I can make a $6k contribution for 2019 as well as an additional $6k contribution for 2020. What would be the best way to structure and get started with my back door Roth IRA? I am wondering if the possible is doable: 1) Perform a complete conversion of all $10k in my Rollover IRA to my Roth IRA. As this conversion will be done in 2020, it will hit my 2020 taxes, and I will look to pay taxes on the full $10k at my income tax bracket. 2) Contribute $6k for 2019. Subsequently transfer and "convert" to Roth IRA. I plan on filing this contribution as "non-deductible", and hence hope I do not have to pay any further tax on this "after-tax" $6k upon conversion to Roth IRA. 3) Contribute $6k for 2020. Subsequently transfer and "convert" to Roth IRA. Similarly, I also plan on filing as "non-deductible and convert the full $6k to Roth IRA. Does #2 and #3 trigger any additional tax liabilities/complications for me? Would technically funding for 2019 now trigger the "pro-rata" rule as I technically held the Rollover IRA in 2019? How best to approach if there's another way? Thanks in advance!
... View more
We provide you with a way to opt-out of advertising activities on our websites
We leverage outside service providers who assist us with our marketing and advertising activities. Note: by opting-out of this tracking, you may still see Intuit advertisements, but they may not be tailored to your interests.