Backdoor Roth
If someone has a large Traditional IRA can they start taking out an amount and move it to a back door Roth? Even if their income is in 100K-200K range?
If someone has a large Traditional IRA can they start taking out an amount and move it to a back door Roth? Even if their income is in 100K-200K range?
Permalink Submitted by Alan - IRA critic on Tue, 2020-09-01 22:16
If the TIRA is large, it is probably entirely or mostly pre tax. Conversions would be mostly taxable. If you plan to do back door Roth conversions year after year and do not have a bad employer plan, you would typically roll the pre tax balance of the TIRA into the employer plan, leaving only the TIRA basis (non deductible contributions) in the TIRA. You can then convert those non deductible contributions tax free. There is no income limit to convert or to make non deductible TIRA contributions.