Questions tagged [roth-conversion]

A Roth conversion refers to taking all or part of the balance of an existing traditional IRA and moving it into a Roth IRA.

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30 views

Roth conversions that include non-deductible IRA contributions

Spouse has a single traditional IRA account into which was made a non-deductible contribution one year (and the appropriate form filed with our taxes). We understand the pro rata rule for partial ...
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How to pay tax on IRA to Roth rollover

I recently changed employers, and merged my old retirement account with a Roth account I have with an independent company. A little less than half the contributions were pre-tax, and I understand I ...
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1answer
88 views

Does 'Taxable Income' from a Roth conversion count as income source for IRA contribution?

Let's assume Jane is retired, and has no income from employment. She still would like to contribute to her IRA [or Roth IRA], but this is not allowed from capital gains or dividend income. Now Jane ...
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Untangle post-tax contributions to traditional 401k while staying in a 401k

I know you can untangle post-tax contributions to a traditional 401k by using rollover IRAs, but can you do the same by effecting a 401k transfer? That is, would it be permissible for you to instruct ...
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2answers
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FICA on Traditional IRA to Roth Coversion

I am aware of the fact that we have to pay taxes on the amount we convert from Traditional IRA to Roth IRA. However, I would like to find out if we have to pay FICA taxes on the conversion. General ...
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Where can I transfer rollover IRA funds to without it becoming income?

I'd like to move untaxed investment money to a new institution. Originally, the money was held in a 401k, then moved to a Rollover IRA. My new bank has both "Traditional IRA" and "Roth IRA" products ...
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2answers
167 views

Taxation of traditional to Roth IRA conversion for non-resident

I left the USA in 2019, am now in India and so am a non-resident for US tax purposes for 2020, and want to convert part of my traditional IRA to Roth IRA. What are the tax implications of this ...
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54 views

Income Tax filing of Roth Info

I may have mis added the amount of 401 K I converted to a Roth account on my taxes. Will the IRS catch that? What will be the penalty?
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71 views

Converted $1 more than the IRS limit when doing backdoor Roth conversion

For doing backdoor Roth conversion I deposited $6000 into my traditional IRA and then converted it a few days later to a Roth IRA account. The money unfortunately earned a little bit of growth when it ...
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Roth conversion: why is cost basis the basis of original SEP-IRA investment?

I just converted some money in a SEP-IRA to a Roth IRA. The value of the fund that money was invested in was down about 10% from when I initially invested in the SEP-IRA. Once the transaction was ...
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3answers
74 views

Can I take a tax loss on Roth IRA conversion?

Because we were over the income limit, my wife and I contributed post-tax dollars to our regular IRAs over the past five years. We would like to do a backdoor Roth IRA conversion while the market is ...
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79 views

How to file taxes for a backdoor Roth and 401(k) roll-in

I am planning to backdoor $6000 into my Roth IRA for 2019, which currently has nothing in it. I have $2500 in a traditional rollover IRA. I was going to put it into the Roth, but due to the ordering ...
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1answer
121 views

How should I backdoor my Roth IRA?

I am single and have no dependents, am in my late 20s, and I made an income in 2019 that lies somewhere inside the phase-out section of direct contributions to a Roth IRA. I do not think I have any ...
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72 views

Traditional IRA to Roth IRA conversion

I want to convert part of my traditional IRA to Roth IRA. Where should I report it on the tax return? I read somewhere that form 8606 is to be filled out but I have not made any non-deductible ...
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1answer
74 views

Correcting an ineligible contribution to a Roth IRA

In 2019 I contributed to a Roth IRA, but while preparing my taxes I realized that I am over the income limit for contributing to a Roth IRA. I would like to recharacterize this contribution to a ...
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Questions about transferring from Roth to Traditional IRA

So I contributed $6000 to 2019 and $6000 to 2020 into a Roth IRA. I bought some ETFs with the $12000 and it’s currently earning. Let’s say the balance is now $13000. Can I transfer $6000 to the 2019 ...
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1answer
79 views

How to solve an IRA fiasco involving excess contributions and incomplete Roth conversion?

I have (what appears to be) a rather challenging situation involving failed backdoor Roth IRA contributions. At a high level, there were excess contributions for the previous tax year, and last year ...
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1answer
85 views

Does removing excess Roth IRA contribution reduce amount contributed?

The title of this question might not make sense, so let me explain. The "excess" contribution here refers to the full 6000 (filing as single) amount in the situation in which the person is not ...
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1answer
131 views

Do we need to consider the account balance as limit when converting from Traditional IRA to Roth IRA?

Please consider the following scenario for a Traditional IRA to Roth IRA conversion using Betterment. A Traditional IRA account was created & funded with $6000. After a week, the account balance ...
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2answers
113 views

Does a pro-rata backdoor Roth IRA conversion come from each IRA proportionally or just the one being converted?

Let's say you have $5,000 in a deductible traditional IRA. You want to contribute $5,000 to a backdoor Roth IRA so you open a non-deductible traditional IRA and fund it with $5,000 to convert to a ...
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138 views

Tax on IRA and 401K to Roth conversion

I have a 403b account with my employer, a simple IRA account, a SEP IRA account, and a Roth IRA account. My wife has a simple IRA account, a Roth IRA account and a rollover IRA account from a previous ...
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1answer
59 views

What is a roll-over to a Roth account?

I don't qualify for contributing directly to Roth accounts. I keep hearing about roll-overs but I don't understand how roll-overs interact with my current accounts. Do I pay taxes on my money (or ...
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Can you fix a rollover that went into a Roth IRA and put it into a regular IRA?

If someone, in the process of leaving a job last summer, rolled over their 401K into a Roth IRA and is now looking at a several thousand dollar tax bill, is there any way to salvage that by ...
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1answer
131 views

Roth IRA Conversion vs Recharacterization

Despite trying to hit the nail on the head, I managed to put more into my Traditional IRA for 2018 than I will be able to deduct due to Traditional IRA phaseout limits. The last thing I want is to ...
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1answer
66 views

Clarification regarding disqualified income for Earned Income Credit (EITC or EIC)

I'm a graduate student with several kids. Right now I'm trying to leverage my temporarily diminished income by "backdoor" rolling-over my 401k account to a Roth IRA account, without inadvertently ...
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1answer
88 views

Rollover from a Traditional IRA to ROTH IRA

I have a few thousands of dollars contributed to a Traditional IRA over 2016, 2017 and 2018. These contributions are post-taxed dollars and I have not deducted them from the IRA contributions (Since ...
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1answer
1k views

Can you immediately withdraw contributions to a mega backdoor Roth IRA without penalty?

My company allows us to do in-service conversions such that we can use mega backdoor Roth. If I convert my after tax contribution upon every paycheck into a Roth IRA (so this is pure after tax ...
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526 views

Is there any upside in electing to have federal taxes withheld during a traditional IRA to Roth IRA conversion?

When converting a traditional IRA to a Roth IRA at Fidelity, one is given the choice to either: elect not to have federal taxes withheld and continue my conversion online. elect to have federal taxes ...
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Why does Vanguard take over one day to convert after-tax 401(k) to 401(k) Roth within one's plan?

Why does Vanguard take over one day to convert after-tax 401(k) to 401(k) Roth within one's plan? Why isn't it faster, or even immediate? For example, if one initiate the conversion on Saturday noon ...
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1answer
143 views

Can I withdraw a conversion to a Roth IRA without penalty?

Several years ago I converted some money from both Traditional and SEP IRAs to my Roth IRA. I paid taxes on the money I converted at the time. I know that a Roth IRA allows you to withdraw ...
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0answers
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Does basis remain in Traditional IRA after a complete conversion?

If you convert your entire Traditional IRA to Roth IRA, but the amount you convert (the value of the Traditional IRA at the time you convert) is less than the basis (after-tax amount) in the ...
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91 views

How to use a business loss to convert a traditional to a Roth IRA?

I have an annual business loss on a C-corp business I own. Is it possible to use that loss to convert traditional pretax IRA funds over to Roth IRA?
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How to convert a Traditional IRA contribution from 2016

Here's some background information about Dave For 2016, Dave has Worked for a company (say, Employer A) that offered a 401k and he contributed to it. Say the balance of the 401k is $30k. Also ...
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125 views

Roth IRA recharacterization

If you converted from IRA to Roth on November 30, 2017 and then did a recharacterization on December 22 2017 (didn't know there was a time frame of 30 days or until 2018 before recharacterization). ...
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2answers
710 views

Mega backdoor: After-tax 401k -> Roth IRA in employer's plan while having an existing pre-tax traditional IRA with a different institution

I've read up on the mega backdoor - the limits, the rules, 55k IRS limit (for 2018), how withdrawals work etc. While going through all of it I happened to come across some people saying - to avoid tax ...
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2answers
365 views

How much can I roll over (and how often) for a mega backdoor roth?

My goal is to contribute more in after-tax dollars to my 401k plan and roll that into a Roth IRA. But I can't find anything that describes how much or how often. Can I move all my after-tax ...
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If I have a 401k and a traditional IRA, am I at risk of paying double taxes if I convert to a Roth IRA?

I started with a traditional IRA that I contributed the maximum amount to for a few years. Then I get a 401k and started contributing to that. I also continued to contribute to my IRA, but it was no ...
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195 views

Should I wait until next year to convert my IRA to Roth?

I'm considering changing my IRA into a Roth IRA. As I understand it, I'll need to pay taxes on all the money I convert. Since the tax brackets for next year will be lowered across the board, does it ...
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1answer
155 views

Is there any downside in converting a traditional IRA account to a Roth IRA, if the contributions to the traditional IRA cannot be deducted?

Is there any downside in converting a traditional IRA account to a Roth IRA, if the contributions to the traditional IRA cannot be deducted? Let's assume that the traditional IRA account hasn't made ...
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377 views

Does moving a traditional IRA to a Roth IRA have to be done in the same institution?

Does moving a traditional IRA to a Roth IRA have to be done in the same bank? I'm asking as I read on https://www.merrilledge.com/retirement/transfer-ira (mirror): Customer service: You can open an ...
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1answer
207 views

Calculating tax on 401(k) to Roth IRA conversion

I understand that doing a conversion from a 401(k) into a Roth IRA is a taxable event. I'm trying to understand the details of how this is taxed. Many resources, including this answer and this blog ...
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1answer
167 views

How can one convert, penalty-free, a traditional, pretax 401(k) to a Roth IRA, without being 59.5 or leaving one's job?

I wrote in one question (mirror) that: A traditional, pre-tax 401(k) may be rolled over to a traditional IRA or Roth IRA if older than 59.5-year-old or if leaving one's job. Someone commented ...
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2answers
975 views

Can one roll over an after-tax 401(k) to a Roth IRA, then any time in the future withdraw my contributions tax-free and penalty-free?

Can one roll over an after-tax 401(k) to a Roth IRA, then any time in the future withdraw one's contributions (that were initially made to the after-tax 401(k)) tax-free and penalty-free? Background ...
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2answers
422 views

When rolling over a Roth 401(k) to a Roth IRA, does one have to pay any tax?

When rolling over a Roth 401(k) to a Roth IRA, does one have to pay any tax as a result of the transfer? For example, are the earnings resulting from the Roth 401(k) investments taxed when transferred ...
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2answers
707 views

Why would an employer not allow their employees to perform a “mega Roth IRA backdoor” (i.e., convert from an after-tax 401(k) to a Roth IRA)?

My employer offers a 401(k) plan through Vanguard to its employees. There exist two types of Roth IRA Rollover: Convert from a non-deductible traditional IRA to a Roth IRA (a.k.a., "Roth IRA ...
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1answer
481 views

Avoiding taxes on backdoor Roth IRA conversion

I have 4 accounts: Vanguard traditional IRA with ~$90k in it Vanguard Roth IRA ~$25k in it Vanguard 401k from a former employer that has ~$40k in it Mass Mutual 401k from current employer that has ~...
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What are the pros/cons of Roth IRA Rollover from a traditional IRA vs. from an after-tax 401(k)?

There exist two types of Roth IRA Rollover (a.k.a., Roth IRA backdoor): Convert from a non-deductible traditional IRA to a Roth IRA Convert from an after-tax 401(k) to a Roth IRA What are the pros/...
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3answers
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Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion

My employer allows after-tax 401k contributions, and has an option for automatic quarterly after-tax 401k -> Roth 401k in-plan conversions. The other option for executing the mega backdoor Roth is to ...
2
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1answer
627 views

Mega backdoor Roth: Is there a 10% penalty if I withdraw from a Roth IRA after an in-service conversion from after-tax 401(k)?

My question is whether I face a 10% penalty on withdrawing money from a Roth IRA after a mega backdoor Roth. Assume I am younger than 59 years old. In more detail: I contribute $10K after-tax to my ...
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1answer
74 views

Back Door Roth Conversion eligibility

I would like to make back door Roth contributions, but I have 2 old SEP IRA annuities ( non-qualified) and I am currently drawing $5,000/year on a third small annuity that will continue until I am 69....