Roth conversion questions

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minervamd
Posts: 4
Joined: Thu Oct 12, 2017 11:55 am

Roth conversion questions

Post by minervamd » Thu Oct 12, 2017 12:39 pm

I've read https://www.bogleheads.org/wiki/Backdoor_Roth_IRA

Looking for confirmation that I am doing this right:

Looking to start backdoor Roth conversions, so I am going to clear out TIRAs for 2017.

Vanguard accounts:
#1 - Personal TIRA = $30k
#2 - Wife TIRA = $10k ($5k nondeductable contribution in 2011)

Clearing steps:
1. Roll #1 into my employer's TIAA 403(b) plan by November 1, 2017
2. Convert #2 from Traditional to Roth. ($5K has already been taxed, $5K growth since 2011, so I understand I will owe tax on $5k)

Now both these TIRA accounts will be at $0 on Nov 1, 2017

So here's the question: Can I still do a 2017 contribution/conversion ($5500 each) in Dec 2017, and then again ($5500 each) in early 2018? Am I missing anything?

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Duckie
Posts: 5019
Joined: Thu Mar 08, 2007 2:55 pm

Re: Roth conversion questions

Post by Duckie » Thu Oct 12, 2017 4:52 pm

minervamd, welcome to the forum.
minervamd wrote:Can I still do a 2017 contribution/conversion ($5500 each) in Dec 2017, and then again ($5500 each) in early 2018?
Yes and yes.

minervamd
Posts: 4
Joined: Thu Oct 12, 2017 11:55 am

Re: Roth conversion questions

Post by minervamd » Thu Oct 12, 2017 6:17 pm

Thanks, I thought so but wasn't sure. I'm a little nervous about completing form 8606 for this first year since I will be doing 2 conversions (one to clear out the "old" funds (my $30k and wife's $10k), and one for the "new" contributions+conversions ($5.5k x 2). Any pitfalls I should watch out for?

crit
Posts: 349
Joined: Mon Jan 05, 2015 12:54 pm

Re: Roth conversion questions

Post by crit » Thu Oct 12, 2017 6:38 pm

The important date is Dec. 31, that your tIRA balance is zero on that date.

Take a stab at the 8606 forms in pencil yourself - they are the best way to see how it works.

Yours should be a straight backdoor - you only convert your recent contribution, not the $30k.

Your wife's will be a bit different, as you are converting more there and will owe more taxes on it.

minervamd
Posts: 4
Joined: Thu Oct 12, 2017 11:55 am

Re: Roth conversion questions

Post by minervamd » Thu Oct 12, 2017 7:06 pm

If I am married filing jointly, I assume all of this gets totaled up and goes on a single 8606 (i.e. I wouldn't fill out a separate one for me and one for her)?

crit
Posts: 349
Joined: Mon Jan 05, 2015 12:54 pm

Re: Roth conversion questions

Post by crit » Thu Oct 12, 2017 7:14 pm

Nope - the I in IRA is for Individual. It will be two sets of forms.

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Roth conversion questions

Post by livesoft » Thu Oct 12, 2017 7:20 pm

It is kind of amazing to me that TIAA will let you roll an IRA into one of their 403(b) plans, but I suppose you checked that out already.
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minervamd
Posts: 4
Joined: Thu Oct 12, 2017 11:55 am

Re: Roth conversion questions

Post by minervamd » Thu Oct 12, 2017 8:48 pm

Yes, it's already underway. Are they not very accommodating in your experience?

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