coalcracker
Dryer sheet wannabe
- Joined
- May 19, 2010
- Messages
- 23
I would like to be able to start contributing via the back door Roth IRA route, but I have approximately $40,000 in a rollover (traditional) IRA from a previous employer. From my understanding the IRS somehow looks at your entire IRA holdings when you convert a non-deductible traditional IRA to a Roth, and it would have unfavorable tax implications that would make it not worth doing?
I cannot place my rollover IRA into my current 401k because it is an individual 401k and not permitted per the folks at Vanguard.
So, what do I do? Convert the $40,000 rollover to a Roth and eat the taxes, then I should be able to use the back door Roth IRA route without additional tax implications? Or scrap the back door Roth IRA idea for the time being?
I should mention I am in the highest marginal tax bracket.
I cannot place my rollover IRA into my current 401k because it is an individual 401k and not permitted per the folks at Vanguard.
So, what do I do? Convert the $40,000 rollover to a Roth and eat the taxes, then I should be able to use the back door Roth IRA route without additional tax implications? Or scrap the back door Roth IRA idea for the time being?
I should mention I am in the highest marginal tax bracket.