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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12
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3answers
1k views

Employer offering Roth 401k as well as traditional 401(k), established in career

I am 33 years old and currently enrolled in my employers traditional 401(k) plan where I am putting 4% of my salary pre tax and having a maximum of 4% employer match into my plan. After 6 more months ...
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2answers
301 views

Deductions greater than Income : Traditional IRA to Roth Conversion?

Jurisdiction is US/Oregon I retired in 2014. In 2015 I am drawing on cash and investments held in a taxable account, and don't foresee needing to tap my IRAs for several years. Thus I am in the ...
9
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2answers
3k views

The five-year rule and backdoor Roth IRA conversions with non-deductible contributions

I have a Roth IRA that was opened and initially funded more than five years ago. Now that I'm earning too much money to make regular contributions, I'd like to further fund this account through a ...
7
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2answers
867 views

What are the disadvantages of a backdoor versus conventional Roth IRA contribution?

My income is close to the Roth IRA limit. I like to do my IRA contributions early in the year, before I know exactly how much I will make due to bonuses and such. So I am thinking about doing a ...
7
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3answers
413 views

If I expect to have little earned income in a few years, should I prefer a traditional IRA to a Roth IRA now?

I'm currently in the 25% tax bracket, with a salary of $71K; I max out my contributions to a Roth IRA and contribute to a Roth 401(k) past my employer's match. I'm also planning to attend grad school ...
6
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2answers
409 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 ...
6
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2answers
233 views

2014 Traditional IRA Contribution that was not Deducted

I contributed $5,500 to a traditional IRA during tax year 2014. My accountant did not take the traditional IRA deduction, apparently I was not eligible for it. My new accountant is telling me to ...
6
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1answer
558 views

Why do Roth IRAs have income limits if you can just do a backdoor IRA contribution?

As we all know, Roth IRAs have income limits that prohibit individuals from contributing to a Roth IRA if their Modified Adjusted Gross Income is over a certain limit ($133,000 for individual ...
6
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1answer
451 views

Will a Roth 401k rolling over to a Roth IRA allow the money to become penalty-free at withdrawl?

I'm aware that a Roth 401k and a Roth IRA are funded with after-tax amounts, and no taxes are incurred upon withdrawal. However, I have stumbled upon a few articles that state a 10% penalty early ...
6
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2answers
564 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 ...
6
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3answers
1k views

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 ...
5
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1answer
219 views

Should I convert from IRA to a Roth IRA based on an online calculator?

Several online conversion calculators pretty much give me the same or similar results if before and after retirement tax brackets are the same i.e. 25%. If my tax bracket drops to 15% after retirement ...
5
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1answer
123 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 ...
5
votes
1answer
388 views

Using a Roth conversion ladder in a 401(k) while also retaining backdoor Roth IRA conversions

Consider the following scenario: John Q. Public has a high enough MAGI that he is not eligible to make Roth IRA contributions (and hence also cannot deduct traditional IRA contributions). John also ...
5
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1answer
198 views

Avoiding ammending taxes for forthcoming 1099-R for 2011 when filing 2010 for IRA

I over contributed to my traditional IRA last year. This was then converted along with all my traditional IRAs into Roth IRAs in 2010. Then in 2011, I recharacterized the excess and earnings from Roth ...
4
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1answer
193 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 ...
4
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1answer
80 views

Can I still convert a tradtional IRA into a Roth IRA for my 2016 taxes?

I found this similar question, but the comments made to the one and only answer is confusing my understanding of it... Right now I just have one traditional IRA that I opened in 2016, funded from a ...
4
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1answer
2k views

Does converting IRA to Roth count toward contribution limit?

I have a small balance in a traditional IRA (as a result of company-match to Roth 401K contribution) and also a Roth IRA which is fully funded for the year. Can I pay the tax and convert my ...
4
votes
1answer
104 views

Roth conversion with low income

I am a U.S. citizen currently living outside the United States, where I am a student finishing a university degree. I have a small, U.S.-based income ($17k in 2015), and no foreign income. My total ...
4
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0answers
69 views

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 ...
3
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2answers
757 views

Roth 401k Contribution limits reset on job change

I am in my late 20s and am a single filer in US. My current employer and future employer(July '17) both provide Roth 401k plans from the same provider(Fidelity). I am deciding between a)rolling over ...
3
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1answer
86 views

When doing a Roth conversion, is amount converted after tax?

For example, if I convert $30,000 from my Traditional IRA to Roth IRA and that incurs $3,000 in taxes as a result, do I: pay taxes on the amount that goes into the Roth IRA, meaning my Roth IRA ...
3
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2answers
126 views

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 ...
3
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2answers
497 views

Ordering of backdoor Roth conversion and rolling over 401k?

I have two retirement accounts: Traditional IRA funded with non-deductible contributions 401k I left my job so I want to roll over my 401k into a Rollover IRA, but I've also heard about the benefits ...
3
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1answer
465 views

Does a rollover IRA impact your basis for converting a traditional to Roth?

In the United States, does having a rollover IRA impact your basis for converting a traditional to Roth? I ask because I have a 401(k) with a former employer than I could rollover to an IRA and get ...
3
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1answer
138 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 ...
3
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1answer
132 views

Can I convert a traditional IRA to ROTH pre April 2013 and have it matter for 2012

I believe there is opportunity to contribute to an IRA up to April 2013 and have it count on tax year 2012. It wasn't clear from this question, so I'd like to ask specifically if it is possible to ...
3
votes
1answer
423 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 ~...
3
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2answers
2k views

Are distributions from Roth 401k or Roth IRA accounts taxed in India?

I am wondering if India distinguishes between pre-tax and roth IRA/401k accounts. So, if I am contributing to a roth account (401k and/or IRA) - would I have to pay taxes in India again: On the ...
3
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1answer
34 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 ...
3
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2answers
693 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 ...
2
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3answers
625 views

Limitations of the 401(k) to Roth IRA conversion escape hatch

I'm currently planning on retiring before the 59 1/2 year old milestone where 401k's and IRA's become accessible penalty free. One workaround I've heard of to access your retirement funds early is to ...
2
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2answers
116 views

Withrdraw funds that were converted from Traditional IRA to Roth IRA

From a previous employer, I had a traditional 401K which upon leaving that job I rolled into a traditional IRA. With a Roth IRA you can withdraw the "contributions" but not the gains. My question is,...
2
votes
1answer
468 views

Need help with completing a backdoor Roth IRA conversion

I am in need of some advice regarding IRA's, IRS income limits, IRA conversions, etc. Here's the points pertinent to my situation: My wife and I got married this year and will be filing 2012 tax ...
2
votes
2answers
169 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 ...
2
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1answer
80 views

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 ...
2
votes
1answer
444 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 ...
2
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1answer
509 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 ...
2
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1answer
83 views

Same day Roth IRA conversion but lost some money -> How do I list that on my taxes?

I contributed in March 2016 for my 2015 Traditional IRA and then a day later I converted that 2015 IRA into a backdoor 2015 Roth IRA but lost some money in the day I waited to convert. I'm about to do ...
2
votes
1answer
89 views

Is there a limit to how often you can convert a Traditional IRA to a Roth IRA within a given time period?

Is there a limit to the number of times you can convert a Traditional IRA to a Roth IRA within a given time period? For example, if I convert my existing Traditional IRA to a Roth IRA now, and then ...
2
votes
3answers
240 views

Would it ever be a bad idea to convert a traditional IRA to a Roth IRA with the following assumptions?

Assuming: you had enough sitting around right now to pay the taxes you had at least 20 years until retirement you expect at least 7% per year return tax rate being the same as now (even though it ...
2
votes
1answer
503 views

Do I include a spouse's Traditional IRA when converting my non-deductible Traditional IRA into a Roth IRA?

I have a Traditional IRA funded with non-deductible funds (in addition to a Roth IRA) and my spouse has a Traditional IRA funded 100% with deductible funds. I'm interested in converting 100% of my ...
2
votes
2answers
95 views

Clarifying Taxes on Roth IRA Rollover

My wife is planning to roll over her entire Traditional IRA to a Roth IRA using the backdoor form 8606. We are trying to determine if we need to pay taxes on just the deductible contributions made ...
2
votes
2answers
341 views

Is withdrawing principal from Roth-IRA that is from a 401K rollover considered penalty and tax free?

I have a Roth IRA that took its initial contribution as a rollover from a 401k I had with a previous employer. Since the old 401k's contributions were tax-free I ended up paying income tax on the ...
2
votes
1answer
111 views

Backdoor Roth IRA Maneuver - Multiple T-IRA Accounts

The way I understand the pro-rata rule is that if you have $5K in T-IRA (deductible), open and contribute $5K to a new T-IRA (non-deductible), then decide to convert the latter $5K into Roth IRA, you ...
2
votes
1answer
373 views

What do I do with excess contribution to traditional IRA that was converted to a Roth IRA?

I accidentally over contributed $25 to my traditional IRA last year giving a total non-deductible contribution of $5025. This was then converted along with all my traditional IRAs into Roth IRAs in ...
2
votes
1answer
520 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 ...
2
votes
1answer
272 views

Is it better to wait for a market downturn to do a Roth conversion?

Based on this article from Fidelity, it appears that the tax basis for a Roth conversion is the net value of the retirement account at the time of the conversion. As such, let's say I have a ...
2
votes
1answer
520 views

Backdoor Roth IRA conversion deadline and taxes?

I had no previous IRA accounts but this year I deposited $5,500 in March, 2016 into a 2015 Traditional IRA contribution. Then in that same month, I did a backdoor conversion to a Roth IRA account for ...
2
votes
1answer
141 views

Should I convert Traditional IRA to Roth IRA in 2016? (25% tax bracket)

I'm married, in my late 20's and we're considering converting a Traditional IRA to a Roth IRA this year (end of 2016). There's about $7k in the Traditional IRA. Our combined income puts us in the 25% ...