Backdoor Roth 2019 | Ed Slott and Company, LLC

Backdoor Roth 2019

Client has traditional (deductible) IRA with $8,000. Client has 401(k) with $300,000. Income too high for Roth in 2019. Just rolled the $8,000 Traditional IRA to the 401(k) on 6/23/2020. Can client utilize backdoor Roth IRA for 2019? I wanted to make sure the conversion from newly established non-deductible IRA to Roth (that will be completed in the next wee)k will not include the $8,000 Traditional (deductible) IRA.

Yes, that will work. The non deductible TIRA contribution for 2019 made by 7/15 can be converted to Roth tax free. Client could also make their 2020 non deductible contribution at the same time, then convert both contributions at the same time. No pre tax contributions or rollovers can then be done before year end 2020 or the conversion will become taxable. It does NOT matter that there was a pre tax balance at the end of 2019 as long as there is no such balance at the end of 2020.

 

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