Unfortunately, that pro rata rule prevents me from doing a backdoor Roth given the amounts I have in my SEP and rollover IRA's. So I'll have to stick to regular Roth conversions which I'm doing aggressively now and Roth contributions.
One thing though, I thought the 5-year rule only applied to earnings on the converted amounts, not on the converted amounts themselves as tax has already been paid on those amounts.
Great video. I am planning on doing my 2025 backdoor roth in March when I will have the funds to do so. Do you know how quickly Fidelity generates the tax forms that I need to give to my tax guy?
Thanks, a very helpful video. I have a question – Does this 2-step (contribute to Traditional IRA and then transfer to Roth IRA) process need to be done every year that I want to contribute to the Roth IRA? What happens if I contribute directly to the Roth IRA without first contributing to and transferring from the Traditional IRA?
so you don't have to wait until the contributed $ in IRA shows up in your positions ie. SPAXX? I always thought you had to wait for that before doing the transfer to roth.
Thanks for the easy video Blake.. some other videos on Youtube detail this exact process and explain concern with the "IRS Step" rule violation stating that you can't quickly just convert funds same day from Traditional to Roth. It's seems the majority do what you describe though. Can you dispel that rumor as bad advice?
Do I have to transfer $7000 from the bank to my fidelity investment account as first step? What if I directly transfer $7000 from the investment account cash reserves to traditional IRA then convert to Roth?
Another note worthy of mention, if your spouse has money in a traditional, sep, or solo IRA, it does not trigger the pro rata rule for your own personal conversions even if your filing married-jointly. I was worried about this, completely overlooking the “I” in IRA
Great video! Can you transfer from your bank directly to the IRA instead of using the brokerage first?
really good video and well presented.
Unfortunately, that pro rata rule prevents me from doing a backdoor Roth given the amounts I have in my SEP and rollover IRA's. So I'll have to stick to regular Roth conversions which I'm doing aggressively now and Roth contributions.
One thing though, I thought the 5-year rule only applied to earnings on the converted amounts, not on the converted amounts themselves as tax has already been paid on those amounts.
Great video. I am planning on doing my 2025 backdoor roth in March when I will have the funds to do so. Do you know how quickly Fidelity generates the tax forms that I need to give to my tax guy?
Thanks, a very helpful video. I have a question – Does this 2-step (contribute to Traditional IRA and then transfer to Roth IRA) process need to be done every year that I want to contribute to the Roth IRA? What happens if I contribute directly to the Roth IRA without first contributing to and transferring from the Traditional IRA?
Most detailed video on the Backdoor I’ve found and I watched many. Crucial details you covered always left out. Thanks for this.
Please clarify: so we should keep a zero balance within our traditional IRA as to not trigger the pro rata rule. Is this correct?
I have a roth account within my work 401 k does this count as another account and i can not do a conversion because of the pro-rata rule?
so you don't have to wait until the contributed $ in IRA shows up in your positions ie. SPAXX? I always thought you had to wait for that before doing the transfer to roth.
Thanks for the easy video Blake.. some other videos on Youtube detail this exact process and explain concern with the "IRS Step" rule violation stating that you can't quickly just convert funds same day from Traditional to Roth. It's seems the majority do what you describe though. Can you dispel that rumor as bad advice?
Do I have to transfer $7000 from the bank to my fidelity investment account as first step? What if I directly transfer $7000 from the investment account cash reserves to traditional IRA then convert to Roth?
Another note worthy of mention, if your spouse has money in a traditional, sep, or solo IRA, it does not trigger the pro rata rule for your own personal conversions even if your filing married-jointly. I was worried about this, completely overlooking the “I” in IRA