For the past several years, I have maxed my wife and I's Roth IRAs on the 1st of the year. We did this January 1, 2019.
I think for 2019 we will be OK not exceeding the income limits with a MAGI around 180k-190k. This is assuming:
MAGI = 265k Gross - 11k (HSA) - 19k (401k) - 19k(403b) - 19k(457) - 8k(401a) = 189k. I think (hope) this is accurate.
The question is: Should I contribute to our Roth IRAs Jan 1, 2020 for the 2020 contribution year? If we stay fortunate, it is likely that we will be somewhere in the phase-out area or possibly above the top limit for 2020. A large portion of my income is unknown and comes as an end of year bonus.
How hard is it to revert the Roth IRA contributions, then do a backdoor contribution if we are above the limit? From brief research, it seems this is as simple as withdrawing it before you pay taxes, and paying taxes on any gain. Then contributing to a traditional IRA, then converting it to a Roth.
What a charlie foxtrot our tax system is.
It's sort of seeming like I should switch up my strategy and make our IRA contributions at the end of the year once I know what our tax situation is. But I also like the idea of extra time for tax-free compounding by front-loading our contributions.
Thanks!