Kiplinger article on Backdoor Roth IRA
Hi IRA experts. I’m trying to figure out what I’m missing here…why does the author state in this article (https://www.kiplinger.com/retirement/how-a-backdoor-roth-ira-works-and-drawbacks) that each backdoor Roth contribution has to be created as a separate Roth IRA account? With the recapture rules, isn’t it simply a matter of tracking contributions and conversions (taxable and non-taxable) and allocating non-qualified distributions according to the ordering rules? I know it requires good record keeping, but not separate Roth IRAs, right?
Permalink Submitted by Alan - IRA critic on Tue, 2024-01-16 23:10
You are correct. It is surprising that Kiplinger would publish such an article. The back door Roth strategy can be accomplished with a single TIRA account and a single Roth IRA account. However, I do agree that a wealth tax would degrade the benefits of a Roth IRA to the extent that the wealth tax was used in conjunction with lower income tax rates.