Guess I'm pro-rata screwed at this point…..This stuff is wayyy too complicated. I rolled old 401ks into "rollover IRAs" long before anyone ever heard of a Roth IRA…..let alone a Backdoor conversion. I have every account type there is, and several with both pretax and after tax contributions in them.
Any thoughts folks on completing IRA Form 8606 when a recharacterization was needed before a backdoor conversion? – In 2025, I started funding my Roth IRA for the year, but then realized I was going to earn about the 2025 Roth IRA limits, so I recharacterized the contributions and associated earnings to a new Traditional IRA (never had a pre-tax IRA account). Then I maxed out the Traditional IRA account, which now contains the annual limit for 2025 and the earrings, and converted everything over to my existing Roth IRA by the end of the year. Sadly, my cash and former- Roth investments made some dividends so I earned $3 which was not converted the same year.
How should someone who is direct depositing money into brokerage with every paycheck handle this? That’s 26 deposits a year. Immediately place into trad IRA then convert to Roth? Or leave it all sitting as cash then do the trad IRA then Roth all at once at the end of the year? Waiting to do it all at once risks growth potential. But having to do a bunch of conversions each year is also a pain.
you genuinely have the very best account on the entire world wide web! thank you so much for helping us by sharing your knowledge is such clear and thorough manner
Hi Erin, thank you for the vlog! I don't remember if I filled out form 8606 a couple of decades ago. If I did not fill it out, is there a way to update the record?
Guess I'm pro-rata screwed at this point…..This stuff is wayyy too complicated. I rolled old 401ks into "rollover IRAs" long before anyone ever heard of a Roth IRA…..let alone a Backdoor conversion. I have every account type there is, and several with both pretax and after tax contributions in them.
Do rollover IRAs count? You mentioned several other IRAs but not the rollover IRA.
Any thoughts folks on completing IRA Form 8606 when a recharacterization was needed before a backdoor conversion? – In 2025, I started funding my Roth IRA for the year, but then realized I was going to earn about the 2025 Roth IRA limits, so I recharacterized the contributions and associated earnings to a new Traditional IRA (never had a pre-tax IRA account). Then I maxed out the Traditional IRA account, which now contains the annual limit for 2025 and the earrings, and converted everything over to my existing Roth IRA by the end of the year. Sadly, my cash and former- Roth investments made some dividends so I earned $3 which was not converted the same year.
How should someone who is direct depositing money into brokerage with every paycheck handle this? That’s 26 deposits a year. Immediately place into trad IRA then convert to Roth? Or leave it all sitting as cash then do the trad IRA then Roth all at once at the end of the year? Waiting to do it all at once risks growth potential. But having to do a bunch of conversions each year is also a pain.
you genuinely have the very best account on the entire world wide web! thank you so much for helping us by sharing your knowledge is such clear and thorough manner
❤❤❤
Hi Erin, thank you for the vlog! I don't remember if I filled out form 8606 a couple of decades ago. If I did not fill it out, is there a way to update the record?