Backdoor Roth: importance of spouse's tIRA

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lm
Posts: 15
Joined: Wed May 11, 2011 9:43 pm

Backdoor Roth: importance of spouse's tIRA

Post by lm » Thu Oct 05, 2017 2:07 pm

My spouse and I both have employer-sponsered retirement accounts, and we also both have traditional IRAs that were funded with pre-tax money. I am looking into the possibility of a Backdoor Roth contribution. If I understand correctly it is recommended to roll the IRA over to an employer-sponsored account before making the non-deductible contribution that will end up being converted to the Roth IRA.

My question is whether the rules and recommendations apply for my spouse and myself individually, or if we are treated as one unit in this regard (we file taxes jointly). For example, if I want to do a backdoor Roth conversion, should my spouse also rollover the tIRA first, or is it sufficient if only I do that?

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sergeant
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Re: Backdoor Roth: importance of spouse's tIRA

Post by sergeant » Thu Oct 05, 2017 2:16 pm

No, your spouse doesn't need to do anything with her IRA for you to do the backdoor.
Lincoln 3 EOW!

LawyersGunsAndMoney
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Re: Backdoor Roth: importance of spouse's tIRA

Post by LawyersGunsAndMoney » Thu Oct 05, 2017 2:57 pm

Your spouse doesn't need to do anything with her tIRA in order for you to make a Backdoor Roth contribution.

However, given that you both have employer plans and given that your joint income requires you to make a Backdoor contribution - you might want to consider rolling her tIRA into her employer plan if possible, which would make her ability to do a Backdoor Roth a possibility in the future.

lm
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Joined: Wed May 11, 2011 9:43 pm

Re: Backdoor Roth: importance of spouse's tIRA

Post by lm » Thu Oct 05, 2017 3:42 pm

Thank you very much for your replies. We thought that one of us will do it first, and if it's not too much hassle then the other one can do the same thing in a later year.

learning_head
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Re: Backdoor Roth: importance of spouse's tIRA

Post by learning_head » Fri Oct 06, 2017 10:45 am

Your plan makes sense, but just note that you can't go back and make use of tax-advantaged backdoor Roth for prior years. Hassle factor, after you set it up is about an hour per year (and I am being generous here):
- transfer money from linked account to tIRA (5 mins)
- in few days transfer money from tIRA to rIRA (5 mins) and
- file another (simple) form with taxes (15 mins?)

mega317
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Re: Backdoor Roth: importance of spouse's tIRA

Post by mega317 » Fri Oct 06, 2017 11:10 am

learning_head wrote:
Fri Oct 06, 2017 10:45 am
- transfer money from linked account to tIRA (5 mins)
- in few days transfer convert money from tIRA to rIRA (5 mins) and
- file another (simple) form with taxes (15 mins?)
I made a correction to your language. If you mess up the terminology it's easy to mess up the simple tax form, especially if you're just clicking through Turbotax.

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