Slott Report Mailbag: Can I Contribute to a Roth IRA AFTER a Backdoor Roth IRA Conversion?
By Joe Cicchinelli, IRA Technical Expert
Follow Me on Twitter: @JoeCiccEdSlott
This week's Slott Report Mailbag comes to you from the Manchester Grand Hyatt in San Diego, California and Ed Slott's 2-Day IRA Workshop, Instant IRA Success. We answer questions on Roth IRA contributions and more - and as always, we suggest you work with a competent, educated financial advisor who can steer you to a safe, secure retirement.
If a person does a backdoor Roth IRA conversion, can he or she contribute to it thereafter?
Yes, as long as you qualify to make a tax-year Roth IRA contribution. For example, you would need to have compensation and income below certain levels to be able to make a tax-year Roth IRA contribution of $5,500 for 2013 (or $6,500 if age 50 or older).
I'm hoping you can help me with this question, and your website is very good and worth joining in my opinion.
I have an acquaintance through a catholic non-profit organization, who is a sister in the convent. Before she became a sister, she worked for a corporation and has an IRA account as the result of a 401(k) plan rollover. She is approaching age 70 ½ and will need to take an RMD (required minimum distribution). The problem is that any income received by any of the sisters in the convent could conceivably harm their non-profit status.
Can you tell me if you have had any experience with this situation, and is there a workaround that you may be aware of?
Thank you for your help!
She may want to consider doing a direct IRA distribution of up to $100,000 to a qualified charity (known as a qualified charitable distribution or QCD). The amount will be tax-free to the IRA owner. This provision is only available to those age 70 ½ or older at the time of the distribution and is set to expire at the end of this year. Other than this provision, IRAs cannot be gifted or assigned during the lifetime of the account owner. Such a transfer would be taxable to the account owner and the recipient would not have a tax-deferred account.
When my daughter converts my wife and my IRAs to inherited IRAs after we die, is she required to begin RMDs as soon as she converts them or can she wait until age 70 ½? Also, is she required to make RMDs on her inherited Roth IRAs?
Assuming your daughter wants to have a stretch IRA, when inherited IRAs are created after your death, RMDs will have to be taken beginning the year after your death. This is true for both traditional and Roth IRAs.
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