Backdoor Roth questions. ??

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Mardoc01
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Backdoor Roth questions. ??

Post by Mardoc01 » Tue Jul 17, 2018 3:36 pm

I have three Ira acts with td. Two Roths which were converted some years ago when I was able to and/or there was no salary level... my third is trad Ira all contributions post tax and non deductible. I own some equities in it so I presume I will need to pay tax on ? Anything over basis ? Contributions these past years ?? When I backdoor this,,, I guess I will create a ?new Roth when I do this as not to comingle with the other two Roths , if it matters ? So three Roths. The next question is I have a 403b and 457 at work, which I am leaving next week. So if I don't move these to new 401k at next job and decide to convert to a traditional Ira (new) at td. Now this money of course is not post tax Second question is I won't get in trouble because I did backdoor Roth now when I only have the one trad Ira that is post tax non deductible money. ? There is. O problem that subsequently transfer the 403b and form a trad Ira one week later .....??? Thanks for input/suggestions ,etc.

mhalley
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Re: Backdoor Roth questions. ??

Post by mhalley » Tue Jul 17, 2018 3:57 pm

If you roll a nondeuctable IRA into a Roth you will pay taxes on any gains.
It doesn't matter if the trad ira is deductable or not, simply having money in it opens you up to the pro rata rule. As long as there is zero money in trad ira's as of December 31 then the pro rata rule does not apply. I would probably transfer the 403 first just to ensure there are no hiccups.

Mardoc01
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Re: Backdoor Roth questions. ??

Post by Mardoc01 » Tue Jul 17, 2018 4:15 pm

That's the prob. You can transfer my existing trad Ira Because it's post tax money and non deductible I know I have to pay on any gains it grew. The problem is if I transfer the 403b it not post tax no deductible money and therefore I couldn't transfer that over tomroth. I had question that if I do backdoor now with the nondeduct post tax Ira. I am doing what I'm allowed. So I can't move the 403b to another Ira even though I did the backdoor Roth before this. Meaning anytime during the year I'm not allowed to transfer the 403b because this will create a new trad Ira ??? That sucks. If tru. I guess wait till 2019 to move the pretax 403b ?

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Duckie
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Re: Backdoor Roth questions. ??

Post by Duckie » Tue Jul 17, 2018 5:31 pm

Mardoc01 wrote: I have three Ira acts with td. Two Roths which were converted some years ago when I was able to and/or there was no salary level... my third is trad Ira all contributions post tax and non deductible. I own some equities in it so I presume I will need to pay tax on ? Anything over basis ?
Yes, you'll pay taxes on anything over basis.
When I backdoor this,,, I guess I will create a ?new Roth when I do this as not to comingle with the other two Roths , if it matters ?
You don't have to open another Roth IRA. Just transfer the TIRA assets to a current Roth IRA. (And why not transfer the other Roth IRA, too. Get down to just one Roth IRA.)
I have a 403b and 457 at work, which I am leaving next week. So if I don't move these to new 401k at next job and decide to convert to a traditional Ira (new) at td.
If you want to use the backdoor Roth IRA method in the future you either move the old 403b and 457b plans to the new 401k (if allowed) or you leave them where they are. If they have to be moved because their account values are too low (under $5K), and your new 401k won't take them, just roll to an IRA, convert them, and take the one-time tax-hit.
Last edited by Duckie on Tue Jul 17, 2018 6:18 pm, edited 1 time in total.

mhalley
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Re: Backdoor Roth questions. ??

Post by mhalley » Tue Jul 17, 2018 6:12 pm

Dec 31 is the key.

livesoft
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Re: Backdoor Roth questions. ??

Post by livesoft » Tue Jul 17, 2018 6:16 pm

You didn't mention the Form 8606 that you have been filing every year that you made non-deductible traditional IRA contributions. Since you have been doing that, I think you got this down and are practically a pro at all this. Am I right?
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Mardoc01
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Re: Backdoor Roth questions. ??

Post by Mardoc01 » Tue Jul 17, 2018 9:48 pm

livesoft wrote:
Tue Jul 17, 2018 6:16 pm
You didn't mention the Form 8606 that you have been filing every year that you made non-deductible traditional IRA contributions. Since you have been doing that, I think you got this down and are practically a pro at all this. Am I right?
This is why I asked. I frankly don't know that my acct did this each year. If he didn't can I not now backdoor Roth. Or can I file the form this year with the added up basis which I'm sure td has records of. 5500 each year ?

livesoft
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Re: Backdoor Roth questions. ??

Post by livesoft » Wed Jul 18, 2018 6:38 am

Is "acct" 'account' or 'accountant'? If "he" is 'accountant', then I suggest you talk to him. In your situation, I would be able to backdoor Roth and do Roth conversions, but you are not me.
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Mardoc01
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Re: Backdoor Roth questions. ??

Post by Mardoc01 » Wed Jul 18, 2018 10:40 am

livesoft wrote:
Wed Jul 18, 2018 6:38 am
Is "acct" 'account' or 'accountant'? If "he" is 'accountant', then I suggest you talk to him. In your situation, I would be able to backdoor Roth and do Roth conversions, but you are not me.
I can call him but are you saying if a 5606 was not filed each year. I cannot now do a backdoor Roth ? Even if these contibs Were not deducted and were post tax ?

mhalley
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Re: Backdoor Roth questions. ??

Post by mhalley » Wed Jul 18, 2018 10:48 am

If you are behind on filing form 8606, you can send them in without having to amend your tax returns if you did not claim a deduction. You can file back to 1995.
There is a potential fee for not filing the form, but you might send a letter asking it be waived.
https://ttlc.intuit.com/questions/34245 ... uld-do-now
If you cpa has not been filing the forms, I would hold him responsible for any fees and get a new one.
Last edited by mhalley on Wed Jul 18, 2018 10:54 am, edited 1 time in total.

livesoft
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Re: Backdoor Roth questions. ??

Post by livesoft » Wed Jul 18, 2018 10:54 am

Mardoc01 wrote:
Wed Jul 18, 2018 10:40 am
livesoft wrote:
Wed Jul 18, 2018 6:38 am
Is "acct" 'account' or 'accountant'? If "he" is 'accountant', then I suggest you talk to him. In your situation, I would be able to backdoor Roth and do Roth conversions, but you are not me.
I can call him but are you saying if a 5606 (sic) was not filed each year. I cannot now do a backdoor Roth ? Even if these contibs Were not deducted and were post tax ?
I'm hinting very strongly that you should ask these questions of your accountant. That's exactly what you have already paid him for, so let him do his job properly.
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