So 'Back Door' Roth's are now approved (55, conversation, state)
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The way I've read about it....it's not the conversion itself that's affected.
HOWEVER, you can NOT UNdo the conversion as you could in the past.
You used to have until the end of the year, or the filing deadline, I forget which -- but you were allowed to change your mind.
You could do the conversion early in the year, then -- IF you're tax situation wasn't as favorable as you thought it would be -- you could UNdo the conversion.
Now (starting in 2018) -- once it's done -- it's done. You're stuck with that decision.
This only affects conversions. EXCESS contributions are NOT affected and CAN still be reversed (re-characterized).
The article I read stated these conversions cannot be made if the person owns any older standard IRA accounts. Same article suggested rolling these older IRA balances into a 401(k) plan if the plan will accept them, then doing the conversion with current year money.
And do the $5500 and $6500 limits still apply? Sounds like a lot of hassle for little gain if same limits. At least for someone my age.
The article I read stated these conversions cannot be made if the person owns any older standard IRA accounts. Same article suggested rolling these older IRA balances into a 401(k) plan if the plan will accept them, then doing the conversion with current year money.
I think the issue there is having multiple Trad IRAs. Rolling multiple IRAs into a 401k (if even possible), would allow you to have only one Trad IRA. So the 'issue' of proportionality from all IRAs isn't a factor.
The article I read stated these conversions cannot be made if the person owns any older standard IRA accounts. Same article suggested rolling these older IRA balances into a 401(k) plan if the plan will accept them, then doing the conversion with current year money.
And do the $5500 and $6500 limits still apply? Sounds like a lot of hassle for little gain if same limits. At least for someone my age.
the limits only apply to contributions to IRA/Roth IRA only. You can convert any amount from tIRA to Roth IRA and pay the taxes out of pocket to convert. Each person needs to look at their current financial status to see if conversion even makes sense. Not everyone will benefit from conversion unlike Ed Slott's teachings that say everyone should convert. Me thinks as smart as he is on this the reality is that some people are better off keeping tIRA and t401k balances and making an income stream from those instead of making the conversion over and hope that you can recover the balance back. Most people will find that they make the same or less in retirement and therefore taxes will be lower. Even better now with the new tax law in effect.
^^ The point is you won't be able to UN-DO the conversion.
NOT the conversion itself.
Being able to DO a conversation isn't the issue....the ability to do that is UNchanged.
However, the ability to UN-DO, the conversion is what is no longer allowed.
People would UNdo a conversion for tax reasons. Now they won't be able to.
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