Backdoor Roth
I know this has been discussed as being in legislation but nothing has happened to limit or undo current rules. I have been waiting to do backdoor covnersions to ROTH due to my firm will not UNDO these conversions.
Is there any guidance that Back door ROTH iras could still be disallowed or changed by end of 2022?
Other than my firm not allowing undoing them should legislation change, is there any reason why I shouldnt be confident to move forward with these transactions for myself and clients?
Thanks in advance.
Permalink Submitted by Alan - IRA critic on Thu, 2022-09-29 15:07
There is no chance the back door will be closed this year, but in the future anything is possible and the need to raise tax revenue will always exist. No conversion can be recharacterized any longer, so if someone converted IRA basis after it was no longer permitted, it would likely have to corrected by treating the conversion as an excess regular Roth contribution, and removed. Until the back door is eliminated, no reason not to utilize it. I doubt that it would be eliminated retroactively.