converting a traditional to a roth
Question, Is it legal if you already have a Roth Ira and now earn too much to contribute to a Roth, to open a traditional ira, contribute to it, and then roll over to the roth? And if so, does it make sense? Thx
Question, Is it legal if you already have a Roth Ira and now earn too much to contribute to a Roth, to open a traditional ira, contribute to it, and then roll over to the roth? And if so, does it make sense? Thx
Permalink Submitted by Alan - IRA critic on Tue, 2015-06-30 16:18
Yes, anyone can convert a non Roth IRA to a Roth IRA. Income limits disappeared in 2010. It makes sense if you expect your tax rate in retirement to be higher or in some cases equal to your current rate. It also makes sense if you cannot deduct your TIRA contribution and have a high basis in your TIRA from non deductible contributions.
Permalink Submitted by Jim Hagen on Tue, 2015-06-30 18:49
JUST SEEMS LIKE TO EASY OF A SOLUTION OF NOT BEING ABLE TO CONTRIBUTE TO AN ROTH BECAUSE OF INCOME
Permalink Submitted by Alan - IRA critic on Tue, 2015-06-30 19:25
It is rather easy and entirely legal under the tax code. If Congress wants to eliminate this option, they will have to change the tax code in some manner. The popular term for this strategy is “back door Roth” IRA and is widely being used as a tool to fund Roth IRAs for higher income taxpayers.