Seeking some guidance for my DW after getting married earlier this year.
I've done backdoor & mega-backdoor Roth contributions for the last 6 years. Very familiar with that process. Would like to setup my DW so she can do similarly do a backdoor Roth contribution this year (2024) and then in 2025. The issue is my DW has a small tIRA that would limit her from doing backdoor Roth as a result of pro-rata rule.
Any advice on the best order of operations and things to consider?
Details:
- Existing tIRA balance: $32k
- Tax status: MFJ, 24% bracket
- Ages: Late 30's with plans to work until mid-late 50's
The obvious goal is to get her tIRA balance to $0, which would then allow the backdoor Roth process. Is it best to:
A. Convert the $32k tIRA to Roth, pay the tax, and take tIRA balance to zero. Then contribute $7k to tIRA & do backdoor process.
B. Contribute $7k to tIRA, making it $39k, then convert to Roth.
C. Other
I've done backdoor & mega-backdoor Roth contributions for the last 6 years. Very familiar with that process. Would like to setup my DW so she can do similarly do a backdoor Roth contribution this year (2024) and then in 2025. The issue is my DW has a small tIRA that would limit her from doing backdoor Roth as a result of pro-rata rule.
Any advice on the best order of operations and things to consider?
Details:
- Existing tIRA balance: $32k
- Tax status: MFJ, 24% bracket
- Ages: Late 30's with plans to work until mid-late 50's
The obvious goal is to get her tIRA balance to $0, which would then allow the backdoor Roth process. Is it best to:
A. Convert the $32k tIRA to Roth, pay the tax, and take tIRA balance to zero. Then contribute $7k to tIRA & do backdoor process.
B. Contribute $7k to tIRA, making it $39k, then convert to Roth.
C. Other
Statistics: Posted by mceagle555 — Thu Nov 14, 2024 7:59 pm — Replies 2 — Views 149