Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Our MAGI is aprox. $270,000 for 2012
I am covered by a 401K at work. My wife is not and her wages were only $3000
Can we contribute for a Roth IRA for 2012? My guess is no. Are there any options other options for is on the IRA front.
(I already have a Rollover IRA from a previous job at VG worth $100,000+) What about backdoor Roth IRA?
- Posts: 25
- Joined: Fri Sep 07, 2012 7:50 pm
I have no personal experience on this, only what I've read here.
From what I know, the only realistic option you have to contribute to a Roth IRA is by rolling your tIRA into your 401k plan, then making non-deductible tIRA contributions followed by [nearly] immediately rolling those into a Roth IRA. I also think you can do same by making after-tax contributions to your 401k plan, if allowed, then rolling those into your Roth IRA.
Do some searching on these forums, because there has been much discussion and good information posted about the procedures.
- Posts: 593
- Joined: Mon Dec 10, 2012 3:22 pm
Actually, you can contribute to a non-deductible IRA for 2012 and then convert to a Roth IRA in 2013. You can also simply convert in 2013 your existing Rollover IRA to a Roth IRA. In both cases, you will probaby pay lots of taxes.
My recommendation is to do neither even though you could do either one or both.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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- Joined: Thu Mar 01, 2007 9:00 pm
Conversions for you and your wife are taxed separately. If your wife does not have any traditional IRAs she can do a backdoor Roth contribution by making a $5000 non-deductible contribution for 2012 (based on your income) and converting to a Roth in 2013 and pay no tax on the conversion. Your rollover IRA does not affect this since it is not her IRA.
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