Questions tagged [roth-ira]
To be used for questions related to Retirement Tax saving scheme Roth IRA as applicable in the United States
617
questions
1
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1answer
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
votes
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 ...
0
votes
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
votes
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
votes
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"...
2
votes
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
vote
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
votes
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
votes
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
votes
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
votes
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
votes
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 $277.50. Now I received a ...
2
votes
2answers
75 views
Roth IRA on Fidelity received a IRS Form 990-T. What is this for?
A family member has a Roth IRA and she just received an IRS Form 990-T from Fidelity. She was mainly trading with her Roth IRA, which was suppose to be tax free until retirement age.
Does she need to ...
1
vote
0answers
51 views
Are you taxed on money withdrawn from a Roth IRA to pay for alimony?
A QDRO allows a non-penalized distribution from a Roth IRA due to a divorce but what if money is taken out and used for alimony that is not specified in the QDRO? Form 8606 Part III, Line 19 is where ...
0
votes
0answers
25 views
IRA to IRA Roth “Recharacterization” vs “Conversion”, is there a difference in result?
Let's assume this simplified case:
At the beginning of 2020, there is no money in my IRA. I contribute the maximum amount allowed (for me 7k$, because I'm old) from after-tax money, and next day ...
2
votes
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
vote
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 ...
3
votes
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
votes
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
votes
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
votes
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
votes
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
vote
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
votes
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 ...
0
votes
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
votes
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
votes
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
votes
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
votes
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 ...
0
votes
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
votes
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
votes
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
votes
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
votes
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
votes
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 ...
4
votes
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, ...
1
vote
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
votes
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
votes
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
votes
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
votes
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....
1
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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
votes
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
votes
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
votes
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
votes
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
votes
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
votes
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 ...
