Traditional IRA的pre-tax money会在做backdoor时因pro-rata rule产生收入税。一种减小影响的方法是尽量不要往traditional IRA存入pre-tax money。在存入non-deductible contribution后,可能会在做backdoor第二步前产生earning。上面的例子中,就有1k pre-tax earning。在rollover到Roth IRA时也会按比例产生收入税。如果...
403(b), 457(b), or similar accounts. If you do hold tax-deferred IRA dollars on December 31st of the calendar year in which you made the Roth conversion, you’ll be subject to taxes when making your conversion per thepro-rata rule. ...
The article offers advice on how to convert a new non-deductible individual retirement account (IRA) to a Roth IRA at little or no tax cost even if an individual has an existing pre-tax IRA. Cosidering the pro-rata rule, it suggests rolling a pre-tax IRA dollars into a 401(k) and...
When you convert the Traditional IRA to Roth, you receive a 1099-R form.Complete this section only if you converted *during* 2024. If you only converted in 2025, you won’t have a 1099-R until next January. Please followSplit-Year Backdoor Roth in H&R Block, 1st Yearnow and come bac...
An inherited IRA doesn’t count if you keep it separate as an inherited IRA (seeInherited IRA and Roth Conversion Pro-Rata Rule). Everything in the traditional IRA, SEP-IRA, and SIMPLE IRA, except any non-deductible contributions you made in the past, is pre-tax money. For example if ...
仅以mega backdoor而言,目的地pre-tax 401(k)也可以换成traditional IRA。但因为高收入人士往往同时做backdoor(以traditional IRA为跳板的backdoor Roth)。为应对traditional IRA的pro-rata rule,在年底清空traditional IRA为佳,所以mega backdoor优先rollover至pre-tax 401(k),这样一来不影响backdoor。
Let’s say you have a traditional IRA with a pre-tax $15,000 balance. You then open a separate traditional IRA, make a post-tax, nondeductible $5,000 contribution, and do a backdoor Roth conversion. Under the pro-rata rule, the IRS considers the conversion as coming proportionally from...
这个Pro-rata rule呢,就是为了防止大家只convert after-tax to Roth IRA然后把pre-tax 的继续留着。 根据IRS Notice 2014-54里的解释 'If a participant’s account balance in a planqualified under § 401(a) or in a § 403(b) plan includes both after-tax andpretax amounts, then, under §...
The Pro Rata Rule This method can be most beneficial tax-wise if you don’t have other deducted IRA funds, including those previously rolled out of a 401(k), SEP IRAs, or Simple IRAs. If you do, then the portion that you convert to the Roth has to be prorated over the total amoun...
and you don’t have any SEP or SIMPLE IRAs. If you had a few dollars of earnings posted in the Traditional IRA after you converted and you left them in the account, get the value from your year-end statement and put it in the second box. The software will apply the pro-rata rule....