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problem with backdoor roth

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  • Avatar Sportsdoc 
    Participant
    Status: Physician
    Posts: 23
    Joined: 06/20/2018

    I recently funded by tIRA for backdoor roth conversion.  In the few days it took for the tIRA to become available to convert, it grew $1.58.  After reading the advice on WCI, I converted the full amount in the tIRA (including the extra $1.58) to the roth.  Here’s the problem:  in the few days it took for vanguard to execute the conversion, the money in the tIRA grew another $1.60, which it left behind.  Now I have a tIRA with $1.60.  What should I do with that money in the tIRA?  Do I just convert it again to the roth?

    #172143 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 1860
    Joined: 03/01/2018

    Convert that too. This is common.

    Pennies and the Backdoor Roth IRA

    You’ll pay tax on the $3 earnings

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #172155 Reply
    Liked by Peds
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3626
    Joined: 01/08/2016

    Interesting. Vanguard gives you the option to convert all. Did you click that?
    Anyways, hypothetical 24% x $3 = $0.72.
    The IRS rounds up. You’re out an extra 0.28.

    It’s fine.

    #172180 Reply

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