Conversion Limits Backdoor Roth IRAs The 5-Year Rule Does a Conversion Make Sense? The Bottom Line Learn the details and decide whether a conversion makes sense for you By Greg Daugherty Updated November 06, 2024 Reviewed by JeFreda R. Brown ...
you’re supposed to pay taxes when you convert from a pretax-funded account to the Roth.) As with contributions, the five-year rule for Roth conversions uses tax years, but the conversion must
Fairmark和Bogleheads论坛上长期流传一张Kawill’s table,用于作Roth distribution时查看。这张表格汇合了Roth IRA qualified withdrawal条件,ordering rule,以及两个五年规则。读者可测试一下是否能理解表格中的每一个项目Tax和Penalty的结果。 提示:FIVE YEAR CONVERSION HOLDING PERIDO即是recapture penalty的5年,而FIVE...
For this rule, the five-year period begins the first day of the tax year in which you converted money from a traditional IRA (or did a rollover from a qualified retirement plan) to your Roth IRA. For example, if you do a conversion on May 1, 2024, the rule for that conversion actua...
Conversions Taxable取出时,不交税,交罚金取决于这笔Conversion 是不是已经超过五年,若超过五年,则不交罚金,否则要交。 2. Conversions Non-taxable Traditional IRA/ After-Tax 401k 中存入的本金转入Roth IRA 的部分,取出时不交罚金不交税!! 3. Earnings 所有收益,取出交罚金,也交税 : ( ...
“The longer the time between the conversion and using the money, the better,” says Gilbert. “That way the money continues to grow after you paid the tax bill.” Watch out for the five-year rule The IRS generally requires any conversion to have occurred at least five years before you ...
Before you decide on the conversion, make sure you have enough money to cover the taxes. While you can pay for the taxes with some of the money you convert, it’s not advised, since that money then can’t grow tax-free, you may face a 10 percent penalty on some of the money if ...
1See IRS publication 590-B for details about the Roth IRA 5-year rule for contributions and the Roth conversion 5-year rule. See also IRC §408A(d)(2), §72(t), Treas. Reg. §1.408A-6. Need a retirement income strategy?
例子:假设Peter在2015年做了pre-tax 401(k) -> Roth 401(k) rollover。2020年,Peter将Roth 401(k)中的资金全部移入Roth IRA。这样2015年的这笔in-plan Roth rollover在2015年是taxable的,2020年进入Roth IRA时已是第六个tax year,因此可以按照ordering rule,随时无税无罚地取出。
conversion and pay the resulting tax bill in a year when you are in a particularly low tax bracket. you can also convert a small amount each year to avoid an abnormally large tax bill. 10. access to the saver's credit while roth ira contributions won't get you a tax deduction, they...