Hi Bogleheads,
As of yesterday I received a temporary TSP account (90 day limited) with Traditional contributions. At the start of January each year, my spouse and I do the classic Backdoor Roth IRA contribution dance. If I roll over my inherited non-spousal TSP account to a Vanguard inherited IRA account, will that cause a headache come tax filling time? In years past, I have always zeroed out the traditional IRA account. Would I start accruing a basis I need to track in the inherited IRA along with owing tax to perform the Roth conversion?
I can either cash out the TSP account and pay ~32-35% tax OR I can put it into the inherited IRA account and have it distributed within the next 10 years. It is possible that I'll be in the 24% tax bracket before the end of the 10 year window, but most likely would remain in the 32% bracket for at least another 6 years.
Any advice would be greatly appreciated.
As of yesterday I received a temporary TSP account (90 day limited) with Traditional contributions. At the start of January each year, my spouse and I do the classic Backdoor Roth IRA contribution dance. If I roll over my inherited non-spousal TSP account to a Vanguard inherited IRA account, will that cause a headache come tax filling time? In years past, I have always zeroed out the traditional IRA account. Would I start accruing a basis I need to track in the inherited IRA along with owing tax to perform the Roth conversion?
I can either cash out the TSP account and pay ~32-35% tax OR I can put it into the inherited IRA account and have it distributed within the next 10 years. It is possible that I'll be in the 24% tax bracket before the end of the 10 year window, but most likely would remain in the 32% bracket for at least another 6 years.
Any advice would be greatly appreciated.
Statistics: Posted by cmublitz — Thu Oct 03, 2024 8:39 pm — Replies 0 — Views 36