ROTH CONVERSION DEADLINE AND HSA COVERAGE: TODAY’S SLOTT REPORT MAILBAG
Question:
In a recent blog post, you said that the deadline for contributing to a Roth IRA for 2022 is April 18, 2023. Does that include converting a traditional IRA to a Roth?
Contributions
A Refresher Course on Multiple Plan Contribution Limits
As you’ve probably heard, the IRS has announced the IRA and workplace plan contribution limits for 2023. Because most of those limits are tied to inflation, many increased substantially. Among the big jumps were the elective deferral limit for 401(k) and other workplace plans from $20,500 to $22,500 and the overall limit for all plan contributions from $61,000 to $66,000.
Active Participation
Jenny earns a salary of $1,000,000. She is single and is not an active participant in a company retirement plan. Jenny can contribute $6,000 to a traditional IRA and deduct the full amount on her taxes. Benny, also unmarried, has a modified adjusted gross income of $76,000. He participates in a 401(k) at work. Benny can make a $6,000 contribution to a traditional IRA, but he is not allowed to deduct it. What gives? A person making a million can deduct an IRA contribution, but the person with a MAGI of $76,000 cannot? Is this another example of the rich getting richer?
No, not really. The key factor driving eligibility for a deduction of a traditional IRA contribution is not salary or MAGI, but participation (or lack thereof) in a company retirement plan. When a person or their spouse is an “active participant” in a company retirement plan for any part of the plan year,
Are Nondeductible Contributions to a Traditional IRA the Right Move for You?
Let's say you wish to contribute to an IRA in 2018 but have too much income to make a either a deductible contribution to a traditional IRA or a contribution to a Roth IRA. You still have the option to make a nondeductible contribution to a traditional IRA. Might this make sense for you?
The Tax-Filing Deadline is Almost Here – Is Your IRA Ready?
The countdown to the 2017 tax filing deadline is on. The deadline is April 17, 2018, which is really only hours away. Time is running out. Is your IRA ready?
Tracking Roth Contributions for Those Under Age 59½
One of the benefits of a Roth IRA is that contributions can always be distributed out of the Roth IRA with no tax, and no early distribution penalty for those that are under age 59½. But, you have to be able to prove to IRS that you are taking a distribution of contributions only. Under the distribution ordering rules, all Roth IRAs are treated as one Roth account, contributions are deemed to be the first amount distributed, then conversions – first in, first out – and lastly earnings are distributed.
Converting After-Tax Contributions and Aggregating RMDs: Today’s Q&A Mailbag
This week's Slott Report Mailbag answers readers' questions about avoiding converting after-tax contributions to a Roth IRA and aggregating RMDs.
Roth IRA Contributions and RMD Rules: Today’s Q&A Mailbag
This week's Slott Report Mailbag answers readers' questions about Roth IRA contributions and RMD rules.
Don’t Inherit a Mess When Your Spouse Passes Away: This Week’s Q&A
This week's Slott Report Mailbag looks into inherited IRAs, spousal rollovers, and 401(k)'s.
When You Want to Transfer 401(k) Funds from a Former Employer: This Week’s Q&A
This week's Slott Report Mailbag looks into into IRA contributions and rolling over 401(k) assets from former employers.
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