Personal Investments • Audit my plan to clean up existing traditional IRAs to allow for back-door Roth going forward

Hi there, casual reader turned poster to help see if my current plan to clean up my existing traditional IRAs to make a back-door Roth easier going forward is correct.

Current account structures:

• Taxable brokerage - Vanguard - ~$110k

• Roth IRA - Vanguard - ~$16k

• Rollover IRA (from previous 401k) - Vanguard - ~$30k

• Traditional IRA - Vanguard - ~$9k ($7k basis from non-deductible contribution)

• 401k - Fidelity - ~$50k

The goal is to remove those traditional IRAs. My current understanding is that I can roll over my rollover IRA into my 401k. I've called Fidelity and confirmed this with two separate reps at different times that this is allowed for my employers plan. Anything else I should to do confirm that there?

After that, I'll be left with the $9k traditional IRA with $7k in basis. My understanding is that I can do a standard Roth conversion and just pay the taxes on that $2k.

A few questions about this plan:

• Is this all valid?

• What tax documents are involved here? I'm thinking 8606 for the Roth conversion, but will I get a 1099-R, or is there something else involved?

• It seems that this is worth the effort due to the advantages of Roth since I can't contribute directly to the Roth IRA due to my income. Is this a correct assumption? If not, what would I want to focus on outside of Roth?

Or, after all of this said, should I just suck it up and hire a tax professional? This seems straight forward enough, but if the cost isn't very high, I wouldn't mind finding a decent CPA.

I really appreciate the feedback and wisdom of the Boglehead forum. Thanks y'all!

Statistics: Posted by software4life — Thu Aug 29, 2024 9:16 am — Replies 0 — Views 20

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