Author Topic: Trying Backdoor Roth...but still have pre-tax in IRA....  (Read 668 times)

NYC_Squirrel

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Trying Backdoor Roth...but still have pre-tax in IRA....
« on: July 26, 2021, 12:52:10 PM »
Hello,

So when I left my previous employer, I rolled over my ~73k in my 403b to a IRA vanguard account. And at that point, I decided that I needed some Roth, so I split 2/3 of my 403B into Roth account (taking a tax hit at that time) and left the other 1/3 into my IRA account.

I realized that if I tried to do Backdoor ROTH (with non-deductible funding) this year, I would have to pay taxes on some of the 6k conversion.

Should I just suck it up and just do the Backdoor Roth and eat the tax on the conversion (and hopefully one day that all the pre-tax portion of the IRA are converted) vs. contributing to a taxable account?

thanks

reeshau

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Re: Trying Backdoor Roth...but still have pre-tax in IRA....
« Reply #1 on: July 26, 2021, 01:02:52 PM »
The other option is to ask your current employer if they would allow a rollover from your IRA into their plan.  If it has been recently, you might be able to explain it as an indirect rollover from your old employer's plan.

But probably, yes, just suck it up.  Roll it over as a fill-in up to your current tax bracket, or coordinate to do it in a minimum-income year.  (Maybe bonuses are low, or commissions, or stack up your deductions to be able to itemize in a year)  It will not only benefit you with tax-free growth, but it frees you up to do backdoor Roths in the future.  Going the other way, you will just keep asking every year.
« Last Edit: July 26, 2021, 04:20:43 PM by reeshau »

NYC_Squirrel

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Re: Trying Backdoor Roth...but still have pre-tax in IRA....
« Reply #2 on: July 26, 2021, 01:09:01 PM »
oh good point, but I like the funds from Vanguard a lot better vs. what my current employer offers....