I just realized I had $6k in a Traditional IRA and I wanted that converted into a Roth IRA. I just placed the order with Vanguard, it should be done at the close of business today, I hope it does not slip into 2021.

So if you want to do this conversion, you only have a few hours left. Act Now!

.....no backdoor.......

---

_____________________________________

I reject your reality and substitute my own!

Still will have to pay taxes on it.

Quote
Bixby
Still will have to pay taxes on it.

How is this a "backdoor" anything?

Seems like a pretty straightforward everyday conversion.

---

Quote
Sarcany

Quote
Bixby
Still will have to pay taxes on it.

How is this a "backdoor" anything?

Seems like a pretty straightforward everyday conversion.

it is backdoor since I cannot make a direct contribution.

Quote
Bixby
Still will have to pay taxes on it.

Taxes were already paid when I put it into IRA, so I don't want to pay taxes again when I take it out later.

........guys are obsessed with 'backdoor'........

---

_____________________________________

I reject your reality and substitute my own!

Quote
space-time

Quote
Bixby
Still will have to pay taxes on it.

Taxes were already paid when I put it into IRA, so I don't want to pay taxes again when I take it out later.

You said you were converting a Traditional IRA to a Roth. Taxes were NOT paid on the money going into that Traditional IRA, so they will need to be paid this tax year based on the value of the account at the time of the Roth conversion (today). Then going forward the Roth will be tax free with some restrictions on holding time and age.

One advantage of doing it today vs tomorrow is that some of the rules on holding times are based on calendar year, so today is the same as Jan 1, 2020. Tomorrow is a full year later than today.

And there still might be a little extra time after the market closes today. I did a conversion at Fidelity on Dec 24th 2.5 hours after the market closed and it was still dated that day and used the closing prices on the 24th.

For those with high incomes: [www.schwab.com]

It's always seemed odd to me that you can make a contribution to a non-deductible IRA and the next day shift it to a Roth. The article I linked said the IRS may disallow it at some point. My tax-lawyer kid thinks they will not disallow it at this point; she does exactly this backdoor Roth conversion the day after she makes a contribution to a nondeductible IRA.

yes, that was a non-deductible IRA. Taxes were paid.

So, it was a backdoor-contribution using funds from a nondeductible contribution to a traditional IRA, not a backdoor conversion of the traditional IRA.

Gotcha!

---

Thanks, Spacetime! I was under the impression that I had until April 15 to do this!

My biggest motivation for converting some of my traditional IRA to Roth is for my kid’s eventual benefit.

---

Where is there dignity unless there is also honesty? - Cicero

Be kind, for everyone you meet is fighting a battle you know nothing about. —Wendy Mass

Quote
Ammo
Thanks, Spacetime! I was under the impression that I had until April 15 to do this!

My biggest motivation for converting some of my traditional IRA to Roth is for my kid’s eventual benefit.

To be honest, I am not 100% when is the deadline. Yes, you have until April 15 to make a contribution for the previous year, however, I am not sure when is the conversion. I suspect the deadline was today.

Quote
space-time

Quote
Ammo
Thanks, Spacetime! I was under the impression that I had until April 15 to do this!

My biggest motivation for converting some of my traditional IRA to Roth is for my kid’s eventual benefit.

To be honest, I am not 100% when is the deadline. Yes, you have until April 15 to make a contribution for the previous year, however, I am not sure when is the conversion. I suspect the deadline was today.

You can do a backdoor conversion until April 15. That, of course, would mean the original contribution would have be be several days, at least, before that.

I wonder if I could/should do this with my rollover IRA from the 90s which includes all my AAPL stock.

Quote
stephen
I wonder if I could/should do this with my rollover IRA from the 90s which includes all my AAPL stock.

Call your broker! Also discuss with a tax specialist. You may need to pay taxes on it. For me it made sense since I made after tax contributions.

Quote
space-time

Quote
Ammo
Thanks, Spacetime! I was under the impression that I had until April 15 to do this!

My biggest motivation for converting some of my traditional IRA to Roth is for my kid’s eventual benefit.

To be honest, I am not 100% when is the deadline. Yes, you have until April 15 to make a contribution for the previous year, however, I am not sure when is the conversion. I suspect the deadline was today.

You are right. I wanted to convert money from an existing regular IRA to a Roth IRA. The Fidelity advisor I spoke to said for the 2020 tax year I must do that before end of market today.

---

Where is there dignity unless there is also honesty? - Cicero

Be kind, for everyone you meet is fighting a battle you know nothing about. —Wendy Mass

Quote
Ammo

Quote
space-time

Quote
Ammo
Thanks, Spacetime! I was under the impression that I had until April 15 to do this!

My biggest motivation for converting some of my traditional IRA to Roth is for my kid’s eventual benefit.

To be honest, I am not 100% when is the deadline. Yes, you have until April 15 to make a contribution for the previous year, however, I am not sure when is the conversion. I suspect the deadline was today.

You are right. I wanted to convert money from an existing regular IRA to a Roth IRA. The Fidelity advisor I spoke to said for the 2020 tax year I must do that before end of market today.

|
Regular Roth conversions have to be done in the calendar year: [www.fidelity.com].

Back door Roth conversions can happen until the tax deadline, typically April 15: [www.forbes.com]

I'd bet the difference is because regular Roth conversions are statutory while back door conversions are based on the regulations that allow IRA contributions to be made until the tax deadline. You have to set up accounts in the calendar year but contributions can be made until the tax deadline; [www.investopedia.com]