Distributions from a Roth IRA with multiple conversions
I am retired 75 y.o. and have made multiple backdoor conversions yearly for the past seven years starting in 2018. I would like to know if I take a distribution in 2025 that exceeds the 5 year waiting period for part of the distribution would I have to pay and taxes or penalties on the more recent backdoor conversions or on earnings?
Permalink Submitted by Alan - IRA critic on Thu, 2024-12-19 20:52
Because you are over 59.5 and have held a Roth IRA over 5 years, you no longer have any 5 year waiting periods. Your entire Roth balance is qualified and free of any tax or penalty.
This means you no longer have to file Form 8606 to report a distribution. The tax free distribution would only be entered on line 4a of Form 1040.
Permalink Submitted by Gordon Hands on Fri, 2024-12-20 15:20
So because I am 75 AND my initial conversion is past the five year waiting period, then all subsequent conversions and earnings can be withdrawn without taxes or penalties?
Permalink Submitted by Alan - IRA critic on Fri, 2024-12-20 16:44
Yes, and you can take distributions from your Roth IRA anytime you wish with no tax or penalty.
But now that you are subject to RMDs from your non Roth IRAs, you must complete your RMD prior to converting each year.
Permalink Submitted by Gordon Hands on Sat, 2024-12-21 15:20
Thank you! Yes, since age 72 I always take my RMD before doing a conversion.