The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: StressLess on January 09, 2017, 02:08:07 PM

Title: Backdoor Roth Ira question
Post by: StressLess on January 09, 2017, 02:08:07 PM
Hi,

I I wanted to fully fund 2017 and was unsure if I would be able to fund a Roth Ira due to income restrictions. End of year might put us over the cusp on income (definitely phased out of traditional deductible ira) is is better to just do a backdoor Roth from the get go?

Are there any drawbacks to just going ahead and doing that from the start vs a regular Roth?

I can't think of any just wanted a sanity check here...



Title: Re: Backdoor Roth Ira question
Post by: seattlecyclone on January 09, 2017, 05:20:33 PM
As long as you don't have any pre-tax IRA money, there's no real downside to just going with the backdoor off the bat if your income might be too high to make a direct contribution. There's a little bit more paperwork at tax time with the backdoor Roth but otherwise the end result is basically the same.
Title: Re: Backdoor Roth Ira question
Post by: StressLess on January 10, 2017, 05:20:37 AM
right - yes, dont have any pre-tax IRA money.


thanks for the answer, makes sense.

so if i come in under the amount and could have just done a ROTH, just means a few extra forms...

if you contribute to a roth and then make too much seems like you would have to re-characterize and into regular IRA and then roll over into a roth again...?  is that right?