It's more about extra paperwork and hassle, not necessarily means tax disadvantage. No matter what IRAs you are having, you only pay tax once for every penny in them: You either already paid (in roth), or are now paying ( conversion), or will pay later (future distribution). All that matters is the tax rate comparison, where there are a lot of unknowns. Tax diversification is probably wise when you are unsure.
【在 d********n 的大作中提到】 : Bingo. : I am doing backdoor roth. Rollovered some 401k to traditional IRA. so : painful.
d*n
29 楼
not completely true. say you have after tax money, contribute to non-deductible ira, but you have rolled-over ira already, roll over non-deductible ira to roth ira, you would have to pay tax again on the roll over based on the prorated formula. So you pay tax TWICE.
for
【在 w***n 的大作中提到】 : It's more about extra paperwork and hassle, not necessarily means tax : disadvantage. No matter what IRAs you are having, you only pay tax once for : every penny in them: You either already paid (in roth), or are now paying ( : conversion), or will pay later (future distribution). All that matters is : the tax rate comparison, where there are a lot of unknowns. Tax : diversification is probably wise when you are unsure.
w*n
30 楼
I was never in this situation before. Theoretically, I thought eventually when you pay tax for the roll over ira later, you don't have to pay tax for 100% of the money. It should be somehow prorated too, no? Suppose you have a rollover IRA of $45k and you are now doing backdoor for $ 5k. You need to pay tax for 90% of $5k, that is, $4.5k. After you retired, when you distribute money from rollover IRA, you pay tax for whatever money left minus $4.5k. It would be very much unfair if it's not the case. Anyway, good to know there might be a catch.
have formula.
【在 d********n 的大作中提到】 : not completely true. : say you have after tax money, contribute to non-deductible ira, but you have : rolled-over ira already, roll over non-deductible ira to roth ira, you : would have to pay tax again on the roll over based on the prorated formula. : So you pay tax TWICE. : : for
f*n
31 楼
But in this case, you are NOT converting "non-deductible ira to roth ira". Instead, you are converting SOME non-deductible ira, and SOME deductible ira (because the IRS's rules force you to) -- you will still be left with some non-deductible ira and some deductible ira. So of course you need to pay tax on converting the deductible part (but not the non-deductible part).
have formula.
【在 d********n 的大作中提到】 : not completely true. : say you have after tax money, contribute to non-deductible ira, but you have : rolled-over ira already, roll over non-deductible ira to roth ira, you : would have to pay tax again on the roll over based on the prorated formula. : So you pay tax TWICE. : : for
【在 w***n 的大作中提到】 : I was never in this situation before. Theoretically, I thought eventually : when you pay tax for the roll over ira later, you don't have to pay tax for : 100% of the money. It should be somehow prorated too, no? : Suppose you have a rollover IRA of $45k and you are now doing backdoor for $ : 5k. You need to pay tax for 90% of $5k, that is, $4.5k. After you retired, : when you distribute money from rollover IRA, you pay tax for whatever money : left minus $4.5k. It would be very much unfair if it's not the case. Anyway, : good to know there might be a catch. : : have