Questions tagged [roth-ira]

To be used for questions related to Retirement Tax saving scheme Roth IRA as applicable in the United States

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26 views

2020 Backdoor Roth IRA Conversion in 2021 - Concern/Questions

In 2019, I did a backdoor Roth IRA conversion that went off without any problems (put $6000 into traditional IRA, converted to Roth IRA). In 2020, I was looking to do the same, but I hit a snag. I ...
3
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2answers
46 views

Pros and cons of using a Roth IRA to fund home improvements

I have a Roth IRA with a balance of something like $150k. Say around $100k of that is contributions. Due to my income, I am ineligible to contribute to the Roth IRA, but I do maximize contributions to ...
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0answers
42 views

IRA contributions income limit

I never calculated my MAGI, but I don't have any student loans, educational expenses or anything like that for that matter. I just claim standard deduction every year. My net income this year is going ...
4
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3answers
222 views

Consolidate Rollover IRA into my Roth IRA

I have a Rollover IRA from 2016 and I want to move that money into my Roth IRA account. Can I just sell and transfer that money to the Roth IRA with no penalties (no taxes)? Also, that wouldn't count ...
6
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4answers
877 views

How should I split my contributions to Roth IRA and Roth 401k?

I am in my early 20s and currently contribute ~18% of my income to my retirement accounts, 7% to company sponsored Roth 401(k) (Popular Investment Company) and 11% into my Roth IRA (A "Big 3"...
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2answers
56 views

Can IRS construe a Roth conversion to be a wash sale?

Should I do Roth IRA conversions after a market crash? I have too much money in my traditional IRA and not enough money in my Roth IRA. Both accounts use VTSAX. I have no intention of touching it any ...
1
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3answers
48 views

Can a married person open a personal Roth IRA? If yes then is contribution limit based on last year?

A married person MAGI $170,000 year 2020 income. Spouse doesn’t work $0 income. Can this person open a personal Roth IRA? Or does this Roth IRA have to be owned jointly? Also, is Roth IRA contribution ...
29
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6answers
5k views

Is a Roth IRA good for a high schooler?

I am a high-school Senior who will not earn enough income working this summer to have to pay income taxes. I have a full ride to college, so I was thinking of using my earnings/savings for retirement. ...
2
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3answers
147 views

Is a backdoor ROTH IRA contribution still worth it if I have pre-tax IRAs that I can't rollover to a 401k yet?

Starting this year, I can no longer contribute to my ROTH IRA. I have three other IRAs: A rollover IRA (pre-tax), opened in 2020 when I rolled over an old 401k. A SIMPLE IRA (pre-tax), opened in 2020 ...
0
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1answer
44 views

Recharacterization due to Roth IRA overcontribution

In early 2020, I contributed $6000 to my Roth IRA. At the time, my salary was lower, so I didn't think my 2020 AGI would go above 125k. Then I got a new job in mid-2020, which came with a big raise. ...
2
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1answer
38 views

Is “Conversion” a technical term in a Backdoor ROTH Conversion?

I'm doing a backdoor ROTH for the first time with Fidelity. My understanding is the process is simple: Create or have a Traditional IRA Create or have a ROTH IRA Put post-tax money into Traditional ...
2
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1answer
51 views

Why will I be receiving a 1099-R in January of 2022, for income that is supposed to be reported for tax year 2020?

I overcontributed to my Roth IRA by $2,000 in 2020. I realized this when working on my 2020 taxes this year, so withdrew the excess contribution and respective earnings of $277.50. Now I received a ...
2
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2answers
75 views

Roth IRA on Fidelity received a IRS Form 990-T. What is this for?

A family member has a Roth IRA and she just received an IRS Form 990-T from Fidelity. She was mainly trading with her Roth IRA, which was suppose to be tax free until retirement age. Does she need to ...
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0answers
51 views

Are you taxed on money withdrawn from a Roth IRA to pay for alimony?

A QDRO allows a non-penalized distribution from a Roth IRA due to a divorce but what if money is taken out and used for alimony that is not specified in the QDRO? Form 8606 Part III, Line 19 is where ...
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0answers
25 views

IRA to IRA Roth “Recharacterization” vs “Conversion”, is there a difference in result?

Let's assume this simplified case: At the beginning of 2020, there is no money in my IRA. I contribute the maximum amount allowed (for me 7k$, because I'm old) from after-tax money, and next day ...
2
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2answers
74 views

I cannot do Traditional IRA. But I can contribute to Roth IRA. Can I do the non deductible IRA at the same time?

I am not eligible for Traditional IRA this year (2020). But I am still under the limits for Roth IRA. I will contribute to Roth IRA in full. I heard that there is a Non-deductible IRA. Can I do the ...
1
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1answer
75 views

Why is it better to put taxable bonds in tax-exempt accounts?

Resources like this one suggest putting taxable bonds in tax-exempt accounts and equity index funds in taxable accounts. But the expected return of taxable bonds is much lower than that of equity ...
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1answer
1k views

Is it forbidden to have more than one Roth account?

Is there any conflict or any rule against having a Roth IRA and a 401k with Roth contributions?
0
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1answer
35 views

Rollover IRA and Roth IRA Contribution Limit?

I have a 401k from a prior employer that I quit from a couple of years ago. As I cannot invest in it any longer I have decided to move it into a "Rollover IRA". I already have a Roth IRA. ...
3
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1answer
87 views

Is my understanding of the different types of IRAs correct?

I have been getting a bit confused by the variety of IRA accounts available to me and want to check that my understanding of each is correct, in a general sense (ignore complexities like 5 year rules, ...
2
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3answers
47 views

Do taxes on hedging apply between a tax sheltered and non-sheltered account?

I have been reading that there are various tax laws that prevent one from doing things like locking in one's short term gains on a stock by purchasing (or selling) options, or resetting one's cost ...
2
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3answers
89 views

Can I rollover Roth/Traditional 401k into a Roth IRA?

My previous employer offered both a Roth and a Traditional 401k (unclear to me if these are technically separate accounts... as far as I was functionally aware, I had one 401k account, which could ...
1
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1answer
26 views

Converting a contribution to a Roth IRA >60 days after contributing?

I deposited $6k in 2019, and $6k in 2020, but converted $4k to Roth in 2019, and $8k to Roth in 2020. Will this differ any benefit? Will I be taxed differently?
2
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1answer
97 views

What are the upsides of rolling over a Roth 401(k) to a Roth IRA?

Some employer's retirement allows to roll-over Roth 401(k) to a Roth IRA, otherwise this can be done when leaving one's job. Roth IRA has at least 3 upsides compared to Roth 401(k): There are no ...
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1answer
63 views

Wash Sale Rule - Multiple Purchases across accounts

If I purchase a stock/option, sell it for a loss, and then repurchase the same stock/option in multiple accounts, does the wash rule apply to the first repurchase? I think my understanding of options ...
2
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1answer
79 views

Can a Roth 401(k) be transferred somehow to a Roth IRA if younger than 59.5-year-old and not leaving one's job?

I understand that: A Roth 401(k) may be rolled over to a Roth IRA if older than 59.5-year-old or if leaving one's job. It is possible to do in-service distributions from an after-tax 401(k) to a Roth ...
4
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1answer
92 views

After converting after-tax 401(k) into Roth IRA, can the 401(k) contributions be withdrawn from the IRA without penalties?

https://www.investopedia.com/articles/personal-finance/063015/roth-401k-vs-roth-ira-one-better.asp mentions this upside of Roth IRA regarding pre-retirement withdrawals: A final advantage is greater ...
2
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2answers
56 views

Which Tax Year for Return of Excess Roth Contributions?

In January of 2020, I fully funded my and my wife's Roth ($6,000 and $7000 respectively). Little did I know back then, that I'd get a sizable bonus at the end of the year, which put me over the ...
2
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1answer
86 views

How can I remedy a Roth IRA contribution which isn't allowed?

I have always contributed the max to my Roth IRA on the first opportunity in the new year, as I did on January 2, 2020. I ended up getting a major raise and bonus in mid-2020 that pushed my income way ...
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1answer
53 views

If we can go to Europe, Northern Europe, Asia, to establish a corporation and invest in US stocks, then it is like IRA or 401(k)?

Because there are limitations of IRA and 401(k), such as $7000 or some people use somewhat complicated backdoor to do it "legally" have a higher amount, but also subject to penalties if the ...
0
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1answer
87 views

Backdoor Roth IRA conversion while owning SEP-IRA as well

I have a SEP-IRA from my consulting years, many years ago (I haven't contributed to it in years but it does have a balance). I wanted to setup a backdoor Roth IRA conversion by creating Traditional ...
3
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2answers
98 views

Does a rollover from RMD to Roth get taxed twice?

I am 79 years old, and this year might roll over money from a traditional IRA into a Roth account. I have not done this before. Will I get taxed twice on the money, once for taking it out of the ...
5
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1answer
102 views

Can I use a gap year to convert traditional 401k money into a roth IRA to virtually avoid taxes?

My employer offers a 401(k) plan. I decide to leave the company to take a year off. During this year, I make no income. Using various types of tax deductions (mortgage interest, tuition, etc...), is ...
0
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1answer
63 views

Pretax 401k and Roth 401k- additional take home pay not factored in, is it?

All the arguments in favour putting money in the Roth 401K emphasise that the withdrawals are tax free. So if you compare putting the same amount of money during your working career in a trad 401K vs ...
3
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2answers
66 views

How do I figure Roth IRA withdrawals after converting multiple times?

I am converting assets from a traditional IRA to a Roth IRA over multiple years. I know that I cannot take any withdrawals from the Roth before 5 years from the start of the year when I first ...
0
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0answers
29 views

Roth IRAs, Puerto Rico [duplicate]

Can anyone help? I've looked for this info all over but have not been able to find any answers. Are Puerto Rican residents able to invest their Roth IRA assets in any investment company in the ...
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0answers
80 views

Roth IRAs for Residents of Puerto Rico with No Income within the continental US

Can anyone help? I've looked for this info all over but have not been able to find any answers. Are Puerto Rican residents allowed to open a Roth IRA while living and working in Puerto Rico? If so, ...
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2answers
70 views

Can I open a Traditional IRA if I have a 401(k) and a Roth IRA?

I have a Roth IRA that I made and a 401(k) account through my employer. I realized that I will be above the income limit to contribute to Roth IRA and saw that I could do a backdoor by putting money ...
0
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2answers
123 views

Are there penalties for cashing out retirement accounts after a divorce?

I have two retirement accounts that will both get split after my divorce that just got finalized. One is a Roth IRA, the other a 401(k) account. Is it possible to cash out money because of the divorce ...
2
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2answers
84 views

Rolling over pre-tax employer contributions into my Roth 401(k)

If I have set my 401(k) up such that my contributions go to my Roth 401(k), my employer's matching contributions are still made pre-tax and go to my "traditional" 401(k). Can I roll these ...
3
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3answers
132 views

How are tax rates for Roth and Traditional IRAs determined?

I know Roths are all the rage since they were introduced, but I'm not necessarily seeing how or why they are the way to go. As most of you probably know (but FYI for those who don't), the difference ...
0
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0answers
27 views

What is my best investment option as a Canadian citizen who is working temporarily in the US?

I am a Canadian citizen who just moved to the US and am making a relatively good money. My employer provides a 401k with a matching option. Most likely I will be working here temporarily for 3-5 years....
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0answers
30 views

Solo 401K with a Solo Roth 401K and MEGA Backdoor Roth

In 2020, I have worked as both a sole proprietor / individual contractor with no employees and as a W2 part-time employee. I am 41 yrs old (under 50) and will have multiple streams of income in 2020: ...
7
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3answers
2k views

Is there any reason to invest in stocks, ETFs, etc. outside of a tax-advantaged account?

If you have a tax-advantaged account like a Roth IRA, why would you want to invest in stocks in a non tax-advantaged account like say Robinhood, or E-Trade, etc.? Would the tax-advantaged account be ...
3
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1answer
148 views

Can money received as a gift be used to fund a Roth IRA?

My girlfriend has been saving money to start a Roth IRA. For her birthday, I'd like to surprise her by giving her cash - double what she's saved. It will certainly be under the annual exclusion of $15,...
3
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1answer
84 views

Withdraw and return Roth IRA contributions?

If I have a Roth IRA with $10k, $8k of which was contributed by me then can I withdraw $4k and put it back? I understand that it won't be taxed since it is already "after-tax" money but ...
4
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2answers
116 views

How much can I contribute to a Roth IRA?

I worked part time for part of the year, and earned less than the maximum contribution amount, so I can only contribute up to the amount of my income. Which income number is that? Gross pay, net pay, ...
0
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1answer
153 views

Does automatic roth in-plan conversion preclude my ability to mega backdoor roth IRA conversion?

In my 401k plan I have the option to make after-tax contributions (This is different than Traditional/Roth type accounts) Ignoring all gains for simplicity, my 2020 contributions end up like this: I ...
3
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1answer
254 views

How does the “Married filing jointly and your spouse is covered by a plan at work” IRA deduction work?

Let's say that (as of 2020) I make between $124,000 and $196,000 a year, have a 401(k), my spouse does not work, we are both younger than 50, and we file jointly. In the course of trying to maximize ...
0
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2answers
238 views

With the Presidential “Payroll Tax Holiday” being imposed, should I invest the money in ROTH IRA or Regular Brokerage?

We've had a Presidential order creating a "payroll tax holiday", and the best information I can find about this can be read at Forbes and summarized as follows: No/Reduced federal tax from ...

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