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Started By
Message
re: Roth Income Limits and Backdoor
Posted on 2/12/24 at 7:59 am to slackster
Posted on 2/12/24 at 7:59 am to slackster
quote:
Make contribution to Traditional IRA that is not tax deductible.
In what scenario would a traditional IRA NOT be tax deductible?? Do I need another cup of coffee this morning? I thought a traditional IRA is always deductible since you’re taxed on it in retirement years. I’m so confused now and am questioning everything I thought I knew about this.
1
Posted on 2/12/24 at 8:15 am to TDsngumbo
quote:
In what scenario would a traditional IRA NOT be tax deductible?? Do I need another cup of coffee this morning? I thought a traditional IRA is always deductible since you’re taxed on it in retirement years. I’m so confused now and am questioning everything I thought I knew about this.
If you’re covered by a retirement plan at work and make over a certain amount of money, your IRA contribution is not tax deductible. Your spouse is also impacted by you being covered. Pretty straightforward actually.
This post was edited on 2/12/24 at 12:08 pm
Posted on 2/12/24 at 8:19 am to sapo504
quote:
My wife doesn’t have a traditional IRA. She could do a backdoor Roth in her name and that would not trigger pro rata tax, right?
Correct.
And look, the pro-rata rule can still be worth it in the long run. If you’ve got a $20,000 IRA and you’re in your 30s, 20+ years of backdoor Roths would make the pro-rata rule worth it. Would probably be worth it just to convert it all and be clean in future years.
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