BACKDOOR ROTH IRA CONVERSIONS AND THE ANNUAL RMD REQUIREMENT: TODAY’S SLOTT REPORT MAILBAG
Question:
Is it possible to do a Backdoor Roth IRA conversion with a SEP IRA? If yes, how does it work?
Thank you!
Yulia
Roth IRA
How the Contribution Limits Work When You’re in Two Plans
The start of the new year is a good time for a refresher course on the contribution limits that apply when someone is in two different retirement plans at the same time or at different times within the same year (e.g., after changing jobs). The rules are challenging because there are two different contribution limits to worry about – the “elective deferral limit” and the “overall contribution limit.”
How the Contribution Limits Work When You’re in Two Plans
The start of the new year is a good time for a refresher course on the contribution limits that apply when someone is in two different retirement plans at the same time or at different times within the same year (e.g., after changing jobs). The rules are challenging because there are two different contribution limits to worry about – the “elective deferral limit” and the “overall contribution limit.”
529-to-Roth: Now Available, But Questions Persist
Just over a year ago (December 2022), the SECURE 2.0 Act was signed into law. That legislation contained an extensively discussed provision – allowing excess dollars in a 529 college savings plan to be rolled over to a Roth IRA. At the time, we knew there were a couple of unanswered questions in the law as it pertained to the 529-to-Roth transaction. However, since the 529-to-Roth rollover was not permitted until this year (2024), it was anticipated that any nebulous language or confusion would be cleared up well before the 2024 calendar change.
Backdoor Roth IRA Baggage
We hear it all the time. “If your income is too high for a direct Roth IRA contribution, just do a Backdoor Roth. Easy-peasy!”
Not so fast, my friend. A Backdoor Roth IRA transaction is like a musclebound hotel bellhop – it can carry a lot of baggage. However, before we can discuss said baggage…
NEW ROTH PROVISIONS EFFECTIVE IN 2024
When the bell dropped in Times Square last Sunday night, a bunch of new provisions from the SECURE 2.0 legislation kicked in. This article will focus on the Roth-related changes that are effective in 2024.
IRS Gives the Holiday Gift of SECURE 2.0 Guidance
On December 20, the IRS gave us the holiday gift of some guidance on a few provisions from the SECURE 2.0 Act. Notice 2024-02 is in a question-and-answer format and provides much needed clarification on SECURE 2.0 provisions, some of which are already in effect, and others which will come online in just a few short days in 2024.
Roth Conversions and Inherited IRAs: Today’s Slott Report Mailbag
Question:
I have a traditional IRA with a portion being nondeductible contributions. The last nondeductible contribution I made was in 2009. and I have my Form 8606 showing the basis. I want to convert a portion of my traditional IRA to a Roth IRA. Can I convert all of the nondeductible amount plus some of the before-tax contributions to a Roth IRA? I have never taken any distributions from my traditional IRA. I'm 52 years old.
Thanks,
Jeff
QCDs and the Roth 5-year Clock: Today’s Slott Report Mailbag
By Andy Ives, CFP®, AIF®IRA AnalystFollow Us on X: @theslottreport QUESTION: My brother passed away in May 2023. He had a small...
Turning Back the Clocks and Revisiting the Roth IRA Five-Year Clocks
A few weeks ago, many of us were required to turn back our clocks one hour and say goodbye to daylight savings time. And with that change came the usual reminder to change the batteries in our smoke detectors. Based on the number of questions we continue to get about the Roth IRA five-year distribution rules, we think that adjusting the clocks should come with another reminder – on how the Roth IRA clocks work.
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