Hi All,
I did my first time backdoor Roth in early December 2024 in fidelity, and did convert the entire money from the tIRA to Roth IRA, but I just found out that there was a $3 dividend deposited to my tIRA on 12/31, what should I do now? Any tax consequence since this results my tIRA didn't have a 0 balance on 12/31.
Thanks for any advice!
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Backdoor Roth, dividend received on 12/31
Re: Backdoor Roth, dividend received on 12/31
You can convert it now, in which case you will add $3 to your taxable income in 2025. Or you can wait until you do your Backdoor Roth for 2025 and convert it (plus any dividends it earns until then) with your 2025 contribution. Again you will have $3 (plus additional dividends) to add to your 2025 income. Three dollars shouldn't be a big additional income burden for you to pay tax on.
I suppose a minuscule amount of your conversion in 2024 will be taxable because of the $3. I also suppose this is an argument for not doing the Backdoor Roth in December (if you had done it in November, the $3 would have posted then and you could have converted the $3 before 12/31).
I suppose a minuscule amount of your conversion in 2024 will be taxable because of the $3. I also suppose this is an argument for not doing the Backdoor Roth in December (if you had done it in November, the $3 would have posted then and you could have converted the $3 before 12/31).