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I have Traditional and Roth IRA accounts, where I have not put any money in and I was reading What's the deadline to contribute to a Roth IRA

I am not eligible for a direct Roth IRA. So if I understand correctly, at this time (Feb 2020), I can still put money into the traditional IRA for 2019 since I have not yet filed my taxes for 2019, but I will not be able to move it to my Roth IRA account as that would count towards 2020?

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  • Are you eligible to make a wholly deductible contribution for 2019 into your Traditional IRA? Have you made any nondeductible contributions to any of your Traditional IRA accounts? Feb 9, 2020 at 16:40
  • Yes, and I have not made any contributions to any of my IRA accounts.
    – Ufder
    Feb 9, 2020 at 19:06

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It sounds like you are describing a "backdoor Roth IRA contribution", where you make a non-deductible Traditional IRA contribution, and then convert it to a Roth IRA. Assuming you have no pre-tax money in Traditional IRAs, this process does not incur any taxes, and thus is effectively the same as a regular Roth IRA contribution.

The answer is that you can still do this up to July 15, 2020. Or more specifically, the deadline for the first step, the Traditional IRA contribution, is July 15, 2020, and it doesn't matter when you do the second step (the conversion to Roth IRA). Yes, it is true that the Roth IRA contribution will count under the year when the conversion was made, so even if you do the conversion between January 1, 2020 and July 15, 2020, it will count as a 2020 conversion. But it doesn't really matter what year the conversion counts under, since under a properly-executed backdoor Roth IRA contribution, the conversion step incurs no tax anyway. The only thing that that would be different when you do the conversion in 2020 vs 2019 is that you will report it on your 2020 Form 8606 instead of on your 2019 one.

The reason that the contribution has to be made before April 15 and counted under 2019 is that the year of contribution matters for the annual IRA contribution limit of $6000. However, there is no annual limit on conversions, so that consideration doesn't apply to the conversion step.

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  • If there is any pretax money in the Traditional IRA (a more likely situation for most folks), then the backdoor Roth strategy does not work very well. Feb 9, 2020 at 21:03
  • @DilipSarwate No, there is no money contributed to any of my IRA accounts - all are empty and squeaking clean :(
    – Ufder
    Feb 9, 2020 at 21:29
  • @user102008 Yes, the backdoor Roth IRA contribution is what I meant. So from what you are saying, I can put money into the traditional IRA until April 15 of 2020 and push it to Roth IRA. Though in this case, will I be able to put another $6k into the traditional IRA for 2020, and also push it to the Roth IRA? Since now my Roth IRA indirect contribution is $12k for 2020. Will that violate the 2020 Roth IRA max limit? I am guessing not, since its not a direct Roth IRA contribution. But still would like to confirm.
    – Ufder
    Feb 9, 2020 at 21:29
  • So basically what I am asking now as a follow up is that is there any conversion limit from Traditional to Roth IRA for a tax year?
    – Ufder
    Feb 9, 2020 at 21:35
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    @Ufder: No, you are making a total of $6000 of IRA contributions (Traditional IRA contributions in your case) for 2019 and a total of $6000 of IRA contributions (Traditional IRA contributions in your case) for 2020. Neither of those exceed the annual IRA contribution limits. There are no annual limits on conversions.
    – user102008
    Feb 9, 2020 at 23:40

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