Read the backdoor Roth IRA Bogleheads wiki and still have questions…

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need_help_pls
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Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by need_help_pls »

Hi, pretty ignorant when it comes to personal finances. I have a traditional IRA that I rolled over from my workplace 401k 10 years ago. I haven’t made any IRA contributions since then until making the max contributions of $6k in 2020 and 2021 when I finally had a stable job. I keep hearing about the backdoor Roth IRA and how it’s a better option for me than the tIRA. I don’t have a financial advisor to ask these questions after doing some research, so I’m hoping to pose these questions after reading the Bogleheads Wiki entry (https://www.bogleheads.org/wiki/Backdoor_Roth) and some articles.

1. Why does everyone keep saying that the tIRA is taxed only on the distribution? At least for me personally, I had to make my two contributions (once in 2020 and once in 2021) to it using salary after it has been taxed. I couldn’t deduct it from my tax filings due to salary, I guess. Does that mean I get taxed on it twice (the money coming into the tIRA and the money coming out once I start distributions)?

2. Articles note that it’s better to get taxed now versus on the distributions later in retirement, but isn’t everyone’s tax bracket going to be much lower in retirement? Let’s say you make $80k in salary your last year before you retire (and therefore are in the 22% tax bracket for the amount over $55,900) - your annual retirement distributions will always be lower than $80k (because you don’t make as much in retirement as you would working full time) and thus, you’ll be in a lower tax bracket. Am I understanding this correctly?

3. Most articles I read about the backdoor method state that you open a tIRA, make the max contribution, and then convert it within a few days. But what about those of us who have had a tIRA for a long time (even if we never did anything with it)? Since when you follow the process for converting a tIRA to Roth IRA using the backdoor method you have to pay your current income tax rate, why is there ever an advantage for converting any tIRA that has more than a few days of account history?

4. Isn’t a backdoor conversion a one-time thing forever since you can only have one IRA in your life? How come so many articles keep advocating for a backdoor Roth when each individual can only do it once in their lifetime?

Sorry if these are stupid questions, but I just more confused when I read the many articles out there regarding the backdoor Roth IRA process. Thanks for any help.
DonFifer
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by DonFifer »

I have just one quick comment - my income in retirement is higher than when I was working
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familythriftmd
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by familythriftmd »

need_help_pls wrote: Mon Jan 17, 2022 12:12 pm
1. Why does everyone keep saying that the tIRA is taxed only on the distribution? At least for me personally, I had to make my two contributions (once in 2020 and once in 2021) to it using salary after it has been taxed. I couldn’t deduct it from my tax filings due to salary, I guess. Does that mean I get taxed on it twice (the money coming into the tIRA and the money coming out once I start distributions)?
Do you have a high income? After a certain point, the tIRA is not tax-deductible, which might be why you had that issue on the contribution.
investmax
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by investmax »

need_help_pls wrote: Mon Jan 17, 2022 12:12 pm
1. Why does everyone keep saying that the tIRA is taxed only on the distribution? At least for me personally, I had to make my two contributions (once in 2020 and once in 2021) to it using salary after it has been taxed. I couldn’t deduct it from my tax filings due to salary, I guess. Does that mean I get taxed on it twice (the money coming into the tIRA and the money coming out once I start distributions)?
Let me try to answer this question first. ===> "I had to make my two contributions (once in 2020 and once in 2021) to it using salary after it has been taxed." ===> In case of traditional IRA, if your income levels are below a certain point, you can deduct the TIRA contribution and reduce your tax burden. This is what is called a Deductible Traditional IRA. If your income levels are higher than these limits and you still choose to contribute to Traditional IRA, it becomes what is known as Non-Deductible Traditional IRA. As you get by the name, Non-Deductible Traditional IRA is non-deductible, you do not get the aforementioned tax benefit at time of filing taxes. Now in case Non-Deductible Traditional IRA you have already paid the tax on the amount you have deposited i.e. the "basis". Now for this "basis" you do not want to be taxed "twice". You have already been taxed, now you dont want to be taxed on the "basis" at withdrawal. For that you submit the 8606 form during the tax filing, and retain it for your records. This keeps track of the basis, i.e. the amount you have already paid taxes on and for which you do not need to pay taxes during withdrawal.
investmax
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by investmax »

The BH wiki is very detailed, accurate and comprehensive, however it can also be terse. I can suggest these videos which can explain the process and mechanics of the Backdoor Roth IRA

https://www.youtube.com/watch?v=ycY1vDiT0cM

https://www.youtube.com/watch?v=S75yfnDHN3M&t=529s

https://www.youtube.com/watch?v=16Wfqzmd9tU

Now in your specific case you seem to have a mix of non-deductible contributions and deductible rollover 401K contributions. This complicates your strategy to an extent. Also did you file 8606 for your last 2 years non-deductible IRA contributions. You may need to get that straightened out. You may need to check if you can rollover the deductible rollover 401K portion somehow to your existing employer 401K. Now that non-deductible IRA contributions have been co-mingled here, I dont know how that can be done, but perhaps other memebers can advise.
mogg
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by mogg »

Some well written explanations:

https://thefinancebuff.com/case-against-roth-401k.html

Summary: If you can deduct contributions to a traditional IRA, do it. Otherwise do a roth. Since you don't qualify to deduct IRA contributions, you should do a backdoor roth.

https://thefinancebuff.com/the-backdoor ... ow-to.html

Summary: Optimally roll amount in tradition IRA that would be taxed into 401k as investmax mentions. Then convert your traditional IRA to a roth with no tax consequences, other than having to file.

1. For low income, contributions to traditional IRA are tax deductible - sounds like it doesn't apply to you.

2. Many bogleheads save a lot. Max-ing out traditional 401k's by itself often causes income in retirement to exceed income during work years.

3. Since you have an active traditional IRA, either roll taxable amounts into your 401k or pay the tax when you convert.

4. You can have many IRA's. At one brokerage I have both a traditional and roth IRA. I have other brokerage accounts with IRA's. You can backdoor convert as many times as you like. The government wants you to convert since they think that when you convert, you will pay taxes.
an_asker
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by an_asker »

need_help_pls wrote: Mon Jan 17, 2022 12:12 pm Hi, pretty ignorant when it comes to personal finances. I have a traditional IRA that I rolled over from my workplace 401k 10 years ago. I haven’t made any IRA contributions since then until making the max contributions of $6k in 2020 and 2021 when I finally had a stable job. I keep hearing about the backdoor Roth IRA and how it’s a better option for me than the tIRA. I don’t have a financial advisor to ask these questions after doing some research, so I’m hoping to pose these questions after reading the Bogleheads Wiki entry (https://www.bogleheads.org/wiki/Backdoor_Roth) and some articles.

1. Why does everyone keep saying that the tIRA is taxed only on the distribution? At least for me personally, I had to make my two contributions (once in 2020 and once in 2021) to it using salary after it has been taxed. I couldn’t deduct it from my tax filings due to salary, I guess. Does that mean I get taxed on it twice (the money coming into the tIRA and the money coming out once I start distributions)?
Re: tIRA is taxed only on the distribution: This means that as opposed to a normal taxable account where you will be taxed annually on dividends etc, the tIRA will be taxed only when you take money out of it; until then it will keep growing untaxed.

Re: getting taxed twice: Yes, you will get taxed twice, but not on the same money. (Assuming that) The money you put in is after-tax (i.e., you've already paid taxes on it). When you withdraw, that portion will not get taxed again; however, the growth in that entire account will get taxed.
2. Articles note that it’s better to get taxed now versus on the distributions later in retirement, but isn’t everyone’s tax bracket going to be much lower in retirement? Let’s say you make $80k in salary your last year before you retire (and therefore are in the 22% tax bracket for the amount over $55,900) - your annual retirement distributions will always be lower than $80k (because you don’t make as much in retirement as you would working full time) and thus, you’ll be in a lower tax bracket. Am I understanding this correctly?
This is subjective. If you are a super saver who has been deferring taxes all your life, there is a possibility that during retirement, you will have a higher taxable income than during your working years. Whether anyone will or not depends on that person. You will need to do your own research.
3. Most articles I read about the backdoor method state that you open a tIRA, make the max contribution, and then convert it within a few days. But what about those of us who have had a tIRA for a long time (even if we never did anything with it)? Since when you follow the process for converting a tIRA to Roth IRA using the backdoor method you have to pay your current income tax rate, why is there ever an advantage for converting any tIRA that has more than a few days of account history?
It depends. The problem is not that you will lose the tax advantage (on the old tIRA) because you are converting it late. The problem is that you cannot follow the backdoor conversion cleanly going forward if you have a trailing old tIRA. The conversions will be pro-rated and you won't really get full advantage of the (clean) conversion. By clean conversion, I mean the annual backdoor Roth IRA process where you a) create a tIRA and b) within a few days, convert it to a Roth IRA, paying little or no taxes on the conversion.
4. Isn’t a backdoor conversion a one-time thing forever since you can only have one IRA in your life? How come so many articles keep advocating for a backdoor Roth when each individual can only do it once in their lifetime?
No, this is incorrect. The backdoor conversion can be done multiple times, though ideally folks do it annually (per current tax laws).
Sorry if these are stupid questions, but I just more confused when I read the many articles out there regarding the backdoor Roth IRA process. Thanks for any help.
Hope this helps.
investmax
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by investmax »

an_asker wrote: Mon Jan 17, 2022 1:29 pm Re: getting taxed twice: Yes, you will get taxed twice, but not on the same money. (Assuming that) The money you put in is after-tax (i.e., you've already paid taxes on it). When you withdraw, that portion will not get taxed again; however, the growth in that entire account will get taxed.
A side-note regarding this specific point. This money is considered after tax if you properly file form 8606. Else I do not know how you will be able to distinguish between pre-tax and after-tax amounts. So filing the 8606 properly during tax filing and retaining them till withdrawal is important to prevent the 'double tax'.

Agree with all your other points.
Navillus1968
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by Navillus1968 »

need_help_pls wrote: Mon Jan 17, 2022 12:12 pm Hi, pretty ignorant when it comes to personal finances. I have a traditional IRA that I rolled over from my workplace 401k 10 years ago. I haven’t made any IRA contributions since then until making the max contributions of $6k in 2020 and 2021 when I finally had a stable job. I keep hearing about the backdoor Roth IRA and how it’s a better option for me than the tIRA. I don’t have a financial advisor to ask these questions after doing some research, so I’m hoping to pose these questions after reading the Bogleheads Wiki entry.
<snip>
Sorry if these are stupid questions, but I just more confused when I read the many articles out there regarding the backdoor Roth IRA process. Thanks for any help.
Before discussing Backdoor Roth IRA, you need to confirm whether a 'front door' Roth contribution is available.

You mention not being able to deduct your Trad IRA contribution. This implies that you &/or your spouse are covered by a workplace 401k (or similar) plan. Correct?
If you're married, is it just you with the 401k or does your wife have one & you don't?

The MAGI limits for Trad IRA deduction & Roth IRA contributions are quite different, with Roth being higher in general.

Trad IRA deduction phases out for Single filers >$68k & stops once MAGI= $78k.
Married filing jointly (MFJ), Trad IRA deduction phases out >$109k & stops once MAGI= $129k.

Roth numbers are higher-
Single, for 2022 your Modified Adjusted Gross Income (MAGI) must be under $129K to make a full $6K contribution (By $144k Roth contribution= $0) to contribute to a Roth IRA.
MFJ, for 2022 your MAGI must be under $204k to make a full $6K contribution (By MAGI $214k Roth contribution= $0).

So, before deciding to do a Backdoor Roth, where does your 2021 MAGI put you & will 2022 be similar?

If your MAGI is under $129K Single or $204K MFJ, you can just do a 'frontdoor' Roth, easy-peasy.
retire2022
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by retire2022 »

Op

Don’t forget with Traditional IRA you are giving up
profits to Uncle Sam get tax deductions.

With Roth IRA accounts and Designated Roth 401k, 403b, 457 accounts you paid your taxes already and don’t need tax deduction, means you won’t share future profits from compounding to Uncle Sam.
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celia
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by celia »

need_help_pls, Welcome to the Bogleheads forum. I was the major editor of the referenced wiki page when it was completely re-written 2 years ago and many others have helped edit it along the way. I hope I can answer all your questions.
Re: Bogleheads Wiki page https://www.bogleheads.org/wiki/Backdoor_Roth

need_help_pls wrote: Mon Jan 17, 2022 12:12 pm 1. Why does everyone keep saying that the tIRA is taxed only on the distribution? At least for me personally, I had to make my two contributions (once in 2020 and once in 2021) to it using salary after it has been taxed. I couldn’t deduct it from my tax filings due to salary, I guess. Does that mean I get taxed on it twice (the money coming into the tIRA and the money coming out once I start distributions)?
When most people do a withdrawal or Roth conversion from a tIRA, they never made a non-deductible contribution, so every dollar in their Roth conversions would then be taxed. So the underlined statement is generally true.

But the Backdoor Roth is a 2-step process, rather than the name of an account. The non-deductible contribution is taxed in the year for which it is contributed (since the dollars were not deducted on your taxes), then those dollars aren't taxed anymore. But the growth on those dollars were never taxed, so only the growth gets taxed when a withdrawal or conversion is done.
2. Articles note that it’s better to get taxed now versus on the distributions later in retirement, but isn’t everyone’s tax bracket going to be much lower in retirement? Let’s say you make $80k in salary your last year before you retire (and therefore are in the 22% tax bracket for the amount over $55,900) - your annual retirement distributions will always be lower than $80k (because you don’t make as much in retirement as you would working full time) and thus, you’ll be in a lower tax bracket. Am I understanding this correctly?
Our taxes are higher in retirement than when we were working, primarily because we can no longer itemize, so we are now left with the standard deduction. Our mortgage is now paid off, and the yearly interest paid was always our largest line item when we itemized.

We also "make more" than when working since we have two pensions and are collecting SS for two people. (We were able to increase our pensions by buying extra years of "service credit" [in place of working more years].) Others who have more income in retirement than when working primarily get it from RMDs or Roth conversions. The latter ones are withdrawals from IRAs where the taxes were deferred, but are still due to the IRS and maybe the state.

As far as tax brackets go, there seems to be a major tax overhaul about every 10 years or so. We currently have historically low tax brackets (10%, 12%, 22%, 24%, 32%, 35% and 37%), but these are temporary. Unless Congress moves to make them permanent, or make other changes in the tax law, in 2026 they will revert back to 2017 levels of (10%, 15%, 25%, 28%, 33%, 35% and 39.6%) although the boundary edges of each bracket could be different than today. So some people are taking advantage of paying taxes now while the rates are lower.
3. Most articles I read about the backdoor method state that you open a tIRA, make the max contribution, and then convert it within a few days. But what about those of us who have had a tIRA for a long time (even if we never did anything with it)? Since when you follow the process for converting a tIRA to Roth IRA using the backdoor method you have to pay your current income tax rate, why is there ever an advantage for converting any tIRA that has more than a few days of account history?
What you can do if the "basis" in the IRA is very small compared to the value of the entire account is move the pre-tax dollars to an employer plan that accepts rollovers. No employer plan is permitted to accept the "basis" so it would be your responsibility to calculate it correctly. After the pre-tax dollars are no longer in an IRA, just convert the basis. Then continue on with the Backdoor Roth each year going forward until you retire.
4. Isn’t a backdoor conversion a one-time thing forever since you can only have one IRA in your life? How come so many articles keep advocating for a backdoor Roth when each individual can only do it once in their lifetime?
You can have as many IRAs and Roth IRAs as you want and they can be at multiple brokerages, too. You are encouraged to convert non-deductible IRA contributions as soon as you can so that future growth can grow as part of the Roth account instead of growing in the IRA and having a larger taxable distribution later on (due the growth happening in the pre-tax IRA).

You can do a Backdoor Roth (ie, contribute, then convert) every year. We have lots of folks here who do this every year. There is no restriction that it can only be done once.

I hope these answers help.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
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celia
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by celia »

investmax wrote: Mon Jan 17, 2022 12:39 pm This is what is called a Deductible Traditional IRA.
If your income levels are higher than these limits and you still choose to contribute to Traditional IRA, it becomes what is known as Non-Deductible Traditional IRA.
The correct terminology here is that there are no such IRAs as these. Instead, it is the contributions that are DEDUCTIBLE or NON-DEDUCTIBLE.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
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need_help_pls
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by need_help_pls »

Thanks everyone, all of your comments are very helpful and it sounds like I have a lot of figure out.

So using more specific numbers, $15k in my 401k from 10 years ago was rolled over into a tIRA. As noted, because I did not have a job for 10 years, there it sat with investment growth until I made a series of annual $6k contributions very recently (2019-2022, so $24k total). I believe the original rollover + the 2019 contributions are untaxed so far (direct rollover + deductible contribution for 2019). My $18k from 2020-2022 contributions are non-deductible due to my high salary amount (my fiancée and I are not yet married and he earns about $25k for his grad school stipend, so it doesn’t sound like I will be below the salary threshold anyway).

So given these numbers, if I decide to use the backdoor process for tIRA -> Roth IRA, I will have to pay taxes on the amount minus the $18k which I used as after-tax contributions that were not deducted? Is the tax rate based on my current salary amount?
investmax wrote: Mon Jan 17, 2022 12:47 pm Now in your specific case you seem to have a mix of non-deductible contributions and deductible rollover 401K contributions. This complicates your strategy to an extent. Also did you file 8606 for your last 2 years non-deductible IRA contributions. You may need to get that straightened out. You may need to check if you can rollover the deductible rollover 401K portion somehow to your existing employer 401K. Now that non-deductible IRA contributions have been co-mingled here, I dont know how that can be done, but perhaps other memebers can advise.
Oh, I have never heard of the Form 8606. I filed my taxes through H&R Block online and looking through my records, it has never asked me to complete a Form 8606. Hopefully I can still file for my previous years.

I currently have a 403b - is it up to my plan administrator to determine if I can rollover my tIRA into the 403b?
celia wrote: Mon Jan 17, 2022 6:03 pm Our taxes are higher in retirement than when we were working, primarily because we can no longer itemize, so we are now left with the standard deduction. Our mortgage is now paid off, and the yearly interest paid was always our largest line item when we itemized.
Oh, got it. I’ve never itemized in my life, mainly because we’ve never owned any property.
Navillus1968
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by Navillus1968 »

need_help_pls wrote: Mon Jan 17, 2022 7:35 pm Thanks everyone, all of your comments are very helpful and it sounds like I have a lot of figure out.

So using more specific numbers, $15k in my 401k from 10 years ago was rolled over into a tIRA. As noted, because I did not have a job for 10 years, there it sat with investment growth until I made a series of annual $6k contributions very recently (2019-2022, so $24k total). I believe the original rollover + the 2019 contributions are untaxed so far (direct rollover + deductible contribution for 2019). My $18k from 2020-2022 contributions are non-deductible due to my high salary amount (my fiancée and I are not yet married and he earns about $25k for his grad school stipend, so it doesn’t sound like I will be below the salary threshold anyway).
You are currently filing Single, but with a fiancée & your income is above the Roth limit of $129K, correct?

Do you plan to marry in 2022? If you're married as of December 31, you're considered to be married for the full year for tax purposes. You would file MFJ next spring for 2022 & your ability to *directly* contribute to a Roth IRA this year would be preserved with income less than $204k. No Backdoor Roth required.
So given these numbers, if I decide to use the backdoor process for tIRA -> Roth IRA, I will have to pay taxes on the amount minus the $18k which I used as after-tax contributions that were not deducted? Is the tax rate based on my current salary amount?
A 'normal' Backdoor Roth process is done with zero pre-tax money in the IRA, so it's a tax-free conversion.
Your IRA has a high percentage of pre-tax money- $15K of 401k rollover, 10 years of growth on $15K, a $6K deductible 2019 IRA contribution & ~3 years of growth on $6k since 2019. You then added post-tax/non-deductible $6K/year for 2020, 2021, & 2022. Any growth on this money is also pre-tax.

You don't mention the size of your IRA, but depending on how much growth happened over the last 14 years, your pre-tax percentage is likely quite high.
The pre-tax conversion amount is added to your income, so that if your W-2 income was $150k & your IRA had $50k of pre-tax money, your 2022 income would be $200k.
You have two basic options-
1. Convert the entire IRA & pay the taxes on the pre-tax portion. The $18K after-tax basis would convert tax-free. Depending on your income level & the amount of pre-tax money in the IRA, this option has the potential to push you into a higher tax bracket & would mean a large tax hit this year.

2. Rollover into your workplace 403b all of the pre-tax money, leaving behind the $18k of non-deductible contributions. Now your Backdoor Roth is tax-free. Assuming your 403b custodian allows it, this is probably your best option.

Unless you're comfortable paying the taxes on converting all the pre-tax money to a Roth IRA in 2022 AND you have room in your current tax bracket to do the conversion without being pushed into a higher marginal tax rate, do the 403b rollover.
investmax wrote: Mon Jan 17, 2022 12:47 pm Now in your specific case you seem to have a mix of non-deductible contributions and deductible rollover 401K contributions. This complicates your strategy to an extent. Also did you file 8606 for your last 2 years non-deductible IRA contributions. You may need to get that straightened out. You may need to check if you can rollover the deductible rollover 401K portion somehow to your existing employer 401K. Now that non-deductible IRA contributions have been co-mingled here, I dont know how that can be done, but perhaps other members can advise.
Oh, I have never heard of the Form 8606. I filed my taxes through H&R Block online and looking through my records, it has never asked me to complete a Form 8606. Hopefully I can still file for my previous years.

I currently have a 403b - is it up to my plan administrator to determine if I can rollover my tIRA into the 403b?
Reconstructing your non-deductible IRA contributions in order to file a corrected Form 8606 should be easy since the contributions are recent.
You will need to file an amended Form 8606 for 2020. Use the 2020 8606 to create a 2021 8606 when you file this spring for last year's taxes. Then, in spring 2023, use the 2021 8606 to create a tax year 2022 Form 8606.
You're only missing one year & you're well within the three year window, no big deal.
https://www.irs.gov/instructions/i8606# ... 99ed0e1098

Yes, your 403b custodian will tell you if your plan allows rollover of pre-tax IRA money into the 403b.
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celia
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Re: Read the backdoor Roth IRA Bogleheads wiki and still have questions…

Post by celia »

I first suggest not doing any Roth conversions this year if you plan to be married this year, until AFTER the wedding. Something unexpected could happen and if you are still Single on December 31, you won't be able to un-do the Roth conversion and the taxes will be higher than if you were married.

I would go ahead and convert everything since a married couple filing jointly has twice as much room in each tax bracket as a Single person does. To estimate your taxes, make a copy of your 2021 tax data file (after you finish your taxes) and add the value of pre-tax that you would be converting to your wages**. Add your spouse's stipend if it is taxable to your wages**. Then change the filing status to Married Filing Jointly, to see how the taxes change.

**Note that adding something to your wages is not the correct way to enter the data when you do your 2022 taxes. But it will give you a quick estimate of the taxes since all these incomes will be taxed in the same way.

So given these numbers, if I decide to use the backdoor process for tIRA -> Roth IRA, I will have to pay taxes on the amount minus the $18k which I used as after-tax contributions that were not deducted? Is the tax rate based on my current salary amount?
The taxable part of the Roth conversion will just be added to your other Taxable Income (a line on the tax return). It may or may not push you into the next tax bracket. However, filing MFJ will double the room in each tax bracket, possibly moving you to a LOWER tax bracket. To help understand how taxes work, first subtract the standard deduction of $25,900 for a married couple from your total estimated 2022 income to get Taxable Income, then use that number to see where it ends up in the first chart here.

Oh, I have never heard of the Form 8606. I filed my taxes through H&R Block online and looking through my records, it has never asked me to complete a Form 8606. Hopefully I can still file for my previous years.
Form 8606 is automatically generated by your tax software each year if you answer all the software questions correctly. So pull out your copy of your tax returns for the last 4 years and go through all the forms to see if there are any generated Form 8606 included. If so, report back to us which years it was and what line 14 says for each year. This is the amount of "basis" (non-deductible contributions remaining in the IRA at the end of that year). It should increase by $6,000 each year. If not, you can edit or submit a new Form 8606 for each year that needs it.

Start by downloading Form 8606 for each year from the IRS website and print them out:
https://www.irs.gov/pub/irs-prior/f8606--2017.pdf
https://www.irs.gov/pub/irs-prior/f8606--2018.pdf
https://www.irs.gov/pub/irs-prior/f8606--2019.pdf
https://www.irs.gov/pub/irs-prior/f8606--2020.pdf

Check your return for each year to confirm you did/didn't deduct your contribution that year. Then fill out the form for each year you didn't deduct your contribution (but made one). Start with the earliest year. For the first year, you will enter 6,000 on line 1 for the appropriate year and zero on line 2 (for remaining basis being carried forward each year). For later years, you will carry over line 14 from the previous year to line 2 of the next year. For line 6, you will have to look up the ending value of the IRA as of the end of the year for each year.

After reading and following the directions, line 14 for the first year should contain 6.000. The following years, it should be 6,000 more than the previous year.

When you are confident these are filled out correctly, you can make a copy for your records and save the form for each year with the tax return for that year. Sign and date the originals (and copies) and send them to the address you would normally send your paper returns to. You don't even have to mess with software to bring this up-to date!
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
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