What the Pro-Rata Rule Means for Your Backdoor Roth IRA
The backdoor Roth IRA pro-rata rule is a little known but highly important regulation that can have significant implications for anyone executing a backdoor Roth IRA conversion. It stipulates how the IRS will treat pre-tax and after-tax contributions when the taxpayer executes a Roth conversion. Creating an individual retirement account (IRA) is one of the […]
IRA Aggregation Rule and Implications for Your Backdoor Roth Conversion
Unlike traditional IRAs or 401(k) accounts, the Roth IRA is funded with after-tax dollars and the investments in the vehicle grow completely tax free. Not only that, but since Roth IRA principal balances have already been taxed, they can be withdrawn tax-free at any time. Roth IRAs have certain limits. You can only contribute $6,000 […]
Mega Backdoor Roth IRA Conversion
A Roth IRA is one of the most popular retirement savings vehicles in America and for good reason. Unlike the traditional IRA or 401(k) plan, Roth vehicles are funded with after-tax dollars and investment growth is tax-free. When you put money into a traditional IRA, you’re taking a tax break now and agreeing to pay […]
Backdoor Roth Taxes: What You Should Consider
When it comes to creating a backdoor Roth, the first thing many people take into consideration is backdoor Roth taxes – and rightly so. There are many instances in which an individual might want to open a Roth IRA. These accounts come with a host of perks, including the opportunity to withdraw funds tax-free. However, […]
