TWO CAUTIONS WHEN DOING A BACKDOOR ROTH CONVERSION
You might be thinking about contributing to a Roth IRA. One big hurdle to making these contributions is the fact that there are income limits that make high income individuals ineligible. For 2024, the phase out range for eligibility for Roth IRA contribution is between $230,000 – $240,000 for those who are married filing jointly […]
HIGHER EDUCATION AND BACKDOOR ROTH CONVERSIONS: TODAY’S SLOTT REPORT MAILBAG
Question: I have a client who is under age 59 ½ with a small traditional IRA. She wants to cash it in and use the funds for college education for her daughter. If I remember correctly, they can use this without a 10% penalty. Is there a limit on the amount she can take penalty-free to use for […]
ROTH CONVERSIONS AND QUALIFIED CHARITABLE DISTRIBUTIONS: TODAY’S SLOTT REPORT MAILBAG
QUESTION: How many times in one year can a person do a Roth conversion? Thank you. ANSWER: A person can do an unlimited number of Roth conversions in a year. Roth conversions do not count against the one-rollover-per-year rule, so there is no concern there. Each conversion in a calendar year will have the same […]
A WAY TO JUMP-START 529-TO-ROTH ROLLOVERS
We have covered in The Slott Report the new SECURE 2.0 provision that allows unused 529 plan funds to be rolled over to Roth IRAs. It originally appeared that this new rule was to be effective for 2024. However, the IRS has now said that rollovers done before April 15, 2024 can count as Roth IRA […]
BACK-DOOR ROTH IRAS AND ROTH 401KS: TODAY’S SLOTT REPORT MAILBAG
Question: Hi Can we contribute backdoor Roth IRA money to my husband’s Roth IRA since I have existing traditional IRA accounts, but my husband has none? Thank you very much for answering my questions. Pinan Answer: Hi Pinan, Many high-income individuals use back-door Roth IRA conversions to fund Roth IRAs when their income is too […]
LAST WEEK IN LA JOLLA
Last week in La Jolla, California, the Ed Slott team hosted another incredibly successful 2-day advisor training program. Nearly 200 financial professionals from across the country chose to join us for some intense IRA and retirement plan education. Topics included all things Roth, net unrealized appreciation, naming trusts as IRA beneficiaries, new SECURE 2.0 updates, […]
ROTH CONVERSIONS AND INHERITED IRAS: TODAY’S SLOTT REPORT MAILBAG
QUESTION: If an individual has both an IRA and a 401(k) and wants to convert the IRA to a Roth IRA, does he have to take both the IRA and the 401(k) RMD (required minimum distribution) before doing a Roth conversion? Thanks for your kind attention. ANSWER: For things like Roth conversions, the pro-rata rule […]
HOW DO YOU REPORT 2023 ROTH IRA CONTRIBUTIONS ON YOUR TAX RETURN? THE ANSWER MAY SURPRISE YOU
Did you make a Roth IRA contribution for 2023? If you have not, you still have some time. The deadline for making a prior year contribution is the tax-filing deadline, not including any extensions you might have. For 2023, that deadline is April 15, 2024. If you have made a Roth IRA contribution for 2023, […]
ROTH IRA FOR A TEENAGER – AN ASTRONOMICAL RESULT?
The mailman delivered my son’s 2023 W-2 the other day. I was curious what he earned last year as a lifeguard at our community pool, so I opened the envelope. Box 1, “Wages, tips, other compensation” said $4,500. Not too bad for a teenager working a summer job – especially since he never spends a […]
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 Answer: Hi Yulia, Yes, you can do a Backdoor Roth IRA conversion with a SEP IRA. You would simply contact the IRA custodian and request the conversion. If the SEP IRA […]