Personal Investments • Near the Roth IRA income limit

Any earner can do a Backdoor Roth IRA, but not everyone can contribute directly. If in doubt, go backdoor. I've done it at least once when I didn't have to. If there's an account causing a pro-rata issue, maybe it's worth waiting, but for most just go back door.

Well, I already have a traditional IRA that I setup in order to rollover an old employers 401k. Am I still eligible for the backdoor? Thx

No, with a previously deducted traditional IRA like a rollover IRA from a previous employer 401(k) you're not a good candidate for backdoor Roth contributions since much of the conversion will be taxable (equal to the percentage that was previously deducted plus growth vs the non-deductible contribution). You could see if your current employer 401(k) would accept a rollover from the rollover IRA. If it's small you could consider whether you want to convert now and pay the tax to allow backdoor Roth contributions now and in the future. If neither of those is true you should avoid all IRA contributions until the end of the year or even near tax time when you know exactly what your AGI will be for the year.

Statistics: Posted by terran — Tue May 07, 2024 8:57 am — Replies 5 — Views 523

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