2024 we will not be doing a backdoor Roth or traditional IRA due to no earned income.You could simply roll the $14k to an IRA and then convert it to Roth. Tax of course will be due but will be at your marginal rate unless it pushes you into the next bracket. It’s likely small dollars in the scheme of things regardless.
This approach allows you to continue the Backdoor Roth unabated.
Cheers
If we roll the $14k into a traditional IRA and then in the same year convert it into a Roth how would that be reported specifically?
If we take it directly and the penalty is 10% is that penalty 10% of the income tax it generated? How would I know how much income tax $14k would generate? Is there an online tool or calculator of some sort? I'm thinking if I'm paying the tax either way (roll into IRA or take directly) and the 10% is only 10% additional tax due (so if $1000 tax is due then I'll pay $100 penalty) then that seems like a fairly cheap price to pay for the liquidity given the dollar amount is fairly nominal.
Statistics: Posted by bogleviewer — Mon Mar 25, 2024 9:53 pm — Replies 2 — Views 236