Search found 6 matches

by nik
Mon Mar 20, 2017 4:24 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA conversion - is my technique allowed?
Replies: 11
Views: 847

Re: Backdoor Roth IRA conversion - is my technique allowed?

...I was trying to follow Morningstar's recommendation- to keep Traditional IRA for a few months, pay tax on any gains so that it doesn't appear your intent was to immediately convert it into Roth IRA. We've discussed this in other threads. It's perfectly legal​ to contribute $5500 to your empty tI...
by nik
Mon Mar 20, 2017 4:23 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA conversion - is my technique allowed?
Replies: 11
Views: 847

Re: Backdoor Roth IRA conversion - is my technique allowed?

We've discussed this in other threads. It's perfectly legal​ to contribute $5500 to your empty tIRA on Tuesday and then convert it to Roth on Wednesday. No subterfuge is needed. Now if you don't have the entire $5500 easily available at the start, then taking a few weeks or months to max your tIRA ...
by nik
Mon Mar 20, 2017 3:13 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA conversion - is my technique allowed?
Replies: 11
Views: 847

Re: Backdoor Roth IRA conversion - is my technique allowed?

With your higher income, it is probably better if you make all future contributions into a traditional IRA and report the contributions as non-deductible. (If you haven't done this for the two 2016 contributions, you need to fix it before doing further contributions that will make things messier.) ...
by nik
Mon Mar 20, 2017 3:08 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA conversion - is my technique allowed?
Replies: 11
Views: 847

Re: Backdoor Roth IRA conversion - is my technique allowed?

If your MAGI for regular Roth IRA contribution purposes is too high for the 4,000 Roth contribution, you can still recharacterize that contribution as a non deductible TIRA contribution and convert back to Roth. While you can do this, it would have been easier to have just contributed the entire 55...
by nik
Mon Mar 20, 2017 3:04 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA conversion - is my technique allowed?
Replies: 11
Views: 847

Re: Backdoor Roth IRA conversion - is my technique allowed?

Our total household income last year was over $200K...This February 2017 I put in $4000 more into the Roth IRA for the maximum permitted amount of $5500 for the tax year 2016. The $1500 backdoor appears fine, but unless you contributed enough pre-tax to get your MAGI below ~$186,000 you don't meet ...
by nik
Thu Mar 16, 2017 12:05 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA conversion - is my technique allowed?
Replies: 11
Views: 847

Backdoor Roth IRA conversion - is my technique allowed?

Hello Bogleheads, I am relatively new to the world of investing. Our total household income last year was over $200K, so I read about backdoor Roth IRA and followed Morningstar's recommended technique for Traditional to Roth IRA conversion. Last October I opened a Traditional IRA account at Vanguard...

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