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backdoor roth ira goof

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  •  Colorad1984 
    Participant
    Status: Physician
    Posts: 4
    Joined: 02/08/2019
    Earnest refinancing bonus

    Through a combination of bad advice from my parents CFP and incomplete reading of the rules and regulations on my part of the backdoor roth, I am in the following situation.  Total income about $310,000.  In 2017 my wife and I each made $5500 contributions to an IRA.  The advisor who handled this did not make the conversion until January 2018.  He also suggested that I roll my 403b into an IRA, which I did in mid 2018.  I realized that the pro rata rule would apply, but not until late december and I did not have time to make any further moves.  At the end of 2018 there was $27,000 in the vanguard IRA.  I did a rough estimate using 8606 forms for 2018 and 2019 and it looks like I would owe taxes on an additional ~7500 in 2018.  I now have two options.  Option one is to move the IRA back to a TIAA 403b, which TIAA says i’m allowed to do even though I’ve stopped working at the training institution.  The second option is to convert the IRA to a roth in 2019.  That way I would clear any IRA balances and be able to start doing the backdoor roth again.  Based on my calculations for the 2019 8606 I would only owe taxes on about $22,000 of additional income.  This is due to a combination of having already paid the prepayment penalty from the pro rata rule on that 27,000 in 2018 and some modest appreciation of the ira fund between 12/31/2018 and today.  I’d love to hear people’s thoughts.

    #189371 Reply
     Peds 
    Participant
    Status: Physician
    Posts: 2699
    Joined: 01/08/2016

    roll it back to the 403.

    #189401 Reply

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