Fortunately, were here to help. Appreciate your help with my understanding of the application of the pro-rata rules and potential workarounds. Thats a tough one and what makes the Roth IRA conversion such a difficult decision to make. Hi June Its complicated! As pointed out, the future is uncertain and changing tax rates would not be a surprise. Hi Matt Not quite! Hi Dave Im not familiar with how the transfer of securities work, at least in regard to bond values. It works for us. Quick question. One potential trap to be aware of is the so-called "five-year rule." Hi Luis You can do the conversion, and there is no limit as to how much you can rollover, nor is there any requirement of having earned income (thats necessary only for new Roth IRA contributions). Roth Theres a slight typo in the equation. There is no carryback period for a conversion as there is for making a regular Roth IRA contribution. Thanks for the conversion math class very helpful in assessing our situation of should we or should we not convert any of the rest of our funds before the deadline age of 70 1/2, giving us a generous timeline. There is no limit on the number of Roth conversions. But you can always do a Roth conversion earned income isnt required for that. And because we can do nothing more than guess, why not hedge your bets. (The following will make that clear!) What amount will be added to his taxable income in 2023? If youre closing out your SEP and converting it to a Roth IRA, what will be left to withdraw from the SEP? My husband is 70 years old, career military retiree, and retired from civilian job six years ago. Getting back to the sequence, the way you understand it is correct. I think a lot of it depends on your current tax bracket. QUESTION: Hello Mr. Slott, I have been doing Roth conversions this year from two small accounts (one a rollover IRA, the other a SEP-IRA) to consolidate into fewer accounts. A better strategy though is to roll the full 50k into the Roth, and pay the tax out of non-tax sheltered resources. make a non-deductible contribution of $Y to a traditional IRA for 2017 tax year The old and new IRA must be of the same ownership type. The big disadvantage of a Backdoor Roth IRA is a whopping tax bill, youre hoping to lower your tax liability in the future. So what you can do is make a non-tax-deductible traditional IRA contribution, and then convert the amount of the contribution to a Roth IRA. I have money in an old 401K from a job I left a couple years ago. Sit down with your tax preparer/CPA to map that out. Then close out that specific Traditional IRA account. also how do I accomplish this task of conversion? 2) Youve opened up a bit of a can of worms with this question. In March of 2014 I did a Roth conversion of my non-deductible IRAs which were the only IRAs I had at the time and later in the year I rolled over a large 401k into an IRA and I was wondering if I can exclude my rollover when determining the tax impact of the conversion since it was done subsequent to the conversion or do I need to aggregate the IRAs as of 12/31/14 to determine what percentage of the conversion is taxable? If the account owner is already 59 or older, this rule can be ignored. Hi Cal Youre thinking right. This would effectively allow me to make $5,500 in Roth IRA contributions every year to an existing (key point here) Roth IRA account. The amount of money you can take out without penalty is limited to the contributions you have made. I have a situation just like the one in your Example 1. We need to know how much and when to convert the IRAs to Roths. Is there anything that would prevent me from doing this, assuming Im willing to pay tax on the money when I roll it over later? This IRA resides with Mutual Fund Company B. I would like to move the IRA with Mutual Fund Company A over to Company B and immediately convert both funds to a ROTH IRA.
Topical Anesthesia In Dentistry,
Carlita Kilpatrick Net Worth,
Pulaski Polka Days 2023,
Mcu Shifting Script Template Google Slides,
Almost A Woman Themes,
Articles R
roth conversion rules 2022