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Contributing to a Roth IRA is a good idea. You can wait to make a 2024 contribution when you know for sure whether or not your modified adjusted gross income allows a direct Roth IRA contribution or you can do a backdoor Roth any time from now through 4/15/25.
For a backdoor Roth, if you have any 12/31 pretax IRA balance (Traditional IRA, Rollover IRA, SEP IRA, SIMPLE IRA), your Roth conversion (step 2 of a backdoor Roth) will be subject to pro-rated taxes as calculated on Form 8606. You can avert this by rolling over your Rollover IRA’s pretax balance into your current 401k if it accepts rollovers in and has good low-cost fund choices.
The BH wiki page “Backdoor Roth” and Form 8606 with instructions may be helpful:
https://www.bogleheads.org/wiki/Backdoor_Roth
https://www.irs.gov/pub/irs-pdf/f8606.pdf
https://www.irs.gov/pub/irs-prior/i8606--2021.pdf
Contributing to a Roth IRA is a good idea. You can wait to make a 2024 contribution when you know for sure whether or not your modified adjusted gross income allows a direct Roth IRA contribution or you can do a backdoor Roth any time from now through 4/15/25.
For a backdoor Roth, if you have any 12/31 pretax IRA balance (Traditional IRA, Rollover IRA, SEP IRA, SIMPLE IRA), your Roth conversion (step 2 of a backdoor Roth) will be subject to pro-rated taxes as calculated on Form 8606. You can avert this by rolling over your Rollover IRA’s pretax balance into your current 401k if it accepts rollovers in and has good low-cost fund choices.
The BH wiki page “Backdoor Roth” and Form 8606 with instructions may be helpful:
https://www.bogleheads.org/wiki/Backdoor_Roth
https://www.irs.gov/pub/irs-pdf/f8606.pdf
https://www.irs.gov/pub/irs-prior/i8606--2021.pdf
Statistics: Posted by HomeStretch — Sun Mar 10, 2024 7:00 am — Replies 6 — Views 506
