Non Deductible IRA’s
Are there any complications from high income taxpayer’s making a non deductible IRA contribution and then rolling into a Roth IRA?
Are there any complications from high income taxpayer’s making a non deductible IRA contribution and then rolling into a Roth IRA?
Permalink Submitted by Alan - IRA critic on Thu, 2015-07-02 16:51
Not as long as Congress does not change current tax law. The Obama administration has recomended that conversions be limited to pre tax dollars, which would end the back door Roth strategy. Of course, if you have a pre tax IRA balance even now, the conversion will be mostly taxable. It is only tax free if all you have in your IRA is basis per Form 8606. Otherwise, there are no current complications and even though the strategy is being targeted, any change is not going to be retroactive. So use the back door Roth while you can before it is eliminated.