backdoor roth screw-up--how to fix?

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mookie
Posts: 130
Joined: Sun Jul 12, 2015 1:35 pm

backdoor roth screw-up--how to fix?

Post by mookie » Mon Mar 23, 2020 12:26 pm

I deposited $6K in my traditional IRA and traded with that money--I bought about $6000 of VTI and then quickly sold it when I realized my mistake. So now I have $6016 in my traditional IRA and I want to transfer it over to my Roth. What should I do with the extra $16?

life in slices
Posts: 90
Joined: Mon Apr 15, 2019 6:00 pm

Re: backdoor roth screw-up--how to fix?

Post by life in slices » Mon Mar 23, 2020 12:30 pm

You can convert the full amount and just pay taxes on the $16 which shouldn't be prohibitive to doing the backdoor roth.

I ultimately end up with a few cents to a dollar or two just in waiting for the deposit to clear in my IRA before i can do the BR conversion

Topic Author
mookie
Posts: 130
Joined: Sun Jul 12, 2015 1:35 pm

Re: backdoor roth screw-up--how to fix?

Post by mookie » Thu Mar 26, 2020 11:18 am

Thank you. I also found this helpful link on how to enter this into Form 8606 when I am doing taxes next year.
https://www.whitecoatinvestor.com/penni ... -roth-ira/
I am going to convert the full amount ($6016) from my traditional to Roth and then pay taxes on the $16 above the $6K limit.

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