Viewing a single comment thread. View all comments

Werewolfdad t1_iy5vjnk wrote

Easiest is just convert the $2500 to Roth.

Depends on whether you want to fight your 401k about a reverse rollover (which can be a pain)

7

iclimbrocks24 OP t1_iy5wc0f wrote

Does a conversion limit the amount I could contribute to a backdoor IRA? Or does the $2500 get converted and then I can contribute the difference for $3500 for up to 6k in total.

1

Werewolfdad t1_iy5x2si wrote

Were the traditional funds contributed this year or in prior years (or are they a rollover from a 401k?)

If the latter, you just pay the taxes on the $2500

So the answers to your questions are likely no and no

3

iclimbrocks24 OP t1_iy5z7j1 wrote

Thanks for your help werewolf. The amounts were contributed over 5 years ago when I was still under the limit. So after converting the initial $2500, I should not be subject to add’l taxes if I want to contribute more to my Roth via the backdoor method for the 2022 tax year?

1

debbiewith2 t1_iy6aoqj wrote

Converting causes the tax bill, but then you should be able to convert the 2022 contributions essentially tax-free.

3