Quick backdoor Roth question

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Quick backdoor Roth question

Post by rickberg » Thu Dec 08, 2016 10:48 am

I had 2 IRA's that I have just rolled into my current employers 401k plan.

If I open a Traditional IRA today and then convert this into a Roth IRA - would I be hit with any tax implications from the pro rata rule? Or should I be good since I have no other IRA's at this point in time?

Thanks for the input.

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Joined: Mon Sep 22, 2008 12:38 pm

Re: Quick backdoor Roth question

Post by kaneohe » Thu Dec 08, 2016 11:03 am

You should run thru your situation on form 8606 https://www.irs.gov/pub/irs-pdf/f8606.pdf
You will see that your TIRAs are valued at a certain point in time (current yr end......see line 6) so as long as your other TIRAs
are "invisible" (in the 401K) by yr end , you should be ok.

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Re: Quick backdoor Roth question

Post by retiredjg » Thu Dec 08, 2016 11:03 am

"This point in time" is not relevant. The point in time that counts is December 31 of the year in which you do a Roth conversion (step 2 of the back door).

So you should be fine as long as you don't roll anything (like a 401k) into IRA before the end of the year.

Assuming you don't have any SEP IRAs or SIMPLE IRAs either….

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