This question has been covered before, but the thread was very specific to the poster's circumstances and hard to follow. I'm asking this in the hope it will be a useful resource for others in a similar situation.
I'm a US citizen temporarily resident in the UK (expected to be for 3-4 years total) and have a Roth IRA with Schwab that I've contributed to for many years. I'd like to continue contributing to this Roth IRA while in the UK using the backdoor Roth mechanism.
When I requested the Roth conversion, Schwab informed me that they were required to take a minimum 10% federal tax withholding due to my non-resident status. They would not complete the conversion without me agreeing to this withholding.
I understand that the withholding is considered to be a distribution and subject to a 10% penalty, but I've heard about a "60-day indirect rollover" rule that sounds like it might allow me to replace the money and avoid the penalty. However, the only option I have online to move money in to the Roth IRA is by making a contribution, and I don't know how to explain to Schwab what I want on the phone.
If you've elected to have tax withholding on a Roth conversion, is it possible to somehow replace that money in the Roth IRA? What is the terminology and how would I explain it to a Schwab representative?
I'm a US citizen temporarily resident in the UK (expected to be for 3-4 years total) and have a Roth IRA with Schwab that I've contributed to for many years. I'd like to continue contributing to this Roth IRA while in the UK using the backdoor Roth mechanism.
When I requested the Roth conversion, Schwab informed me that they were required to take a minimum 10% federal tax withholding due to my non-resident status. They would not complete the conversion without me agreeing to this withholding.
I understand that the withholding is considered to be a distribution and subject to a 10% penalty, but I've heard about a "60-day indirect rollover" rule that sounds like it might allow me to replace the money and avoid the penalty. However, the only option I have online to move money in to the Roth IRA is by making a contribution, and I don't know how to explain to Schwab what I want on the phone.
If you've elected to have tax withholding on a Roth conversion, is it possible to somehow replace that money in the Roth IRA? What is the terminology and how would I explain it to a Schwab representative?
Statistics: Posted by nylon144 — Thu Jan 16, 2025 3:59 pm — Replies 0 — Views 42