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Brenda
My husband has ‘old’ IRAs so we thought we had to convert all the old money first so we stopped making any new IRA contributions. He now thinks he can setup a new IRA account at a different institution and then do a back door Roth (we make too much for a direct Roth).
Any idea if this is valid and what IRS pub might support this?
TIA!!
We realize we have less than 2 weeks to figure this out!
HeathAll traditional IRAs are aggregated and treated as one “giant” IRA for purposes of the pro-rata rule.
If the pre-tax balances in the old IRAs are large, I would look into whether you can roll some of those balances into a workplace plan such as a 401k. That would then free you up to resume backdoor Roth IRAs in a future year.
PhilipNope. IRS considers all IRAs to be one. They must be aggregated for conversion calculations.
BillSorry, your husband is wrong. You have to add up all the ira balances and they get treated as one.
The work around is to roll the iras back into a current 401k plan.
Ericjust set it up at the same institution. the transfer is much quicker. i have like 10 IRA accounts.
PhilipIt doesn’t matter if you have 10 different traditional IRAs with different institutions. They must all be empty to do a backdoor Roth contribution.
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