Just received an email from our CPA as they work on our 2023 returns. For years we've done max Roth IRA contributions in January of each year. I've done 'backdoor' contributions via an otherwise empty tIRA after rolling my older tIRA into my employer 401k. For my non-working spouse we've just made straight Roth IRA contributions each year. But per the CPA note our 2023 AGI exceeds the income limits for eligibility for contribution to a Roth IRA via the spousal route. (For some reason I had it in my head that the AGI limit didn't apply to spousal account contributions)
Additional wrinkle, spouse has ca. $70K in a tIRA so a 'backdoor' needs to factor in the pro rata rule, I believe.
So it looks like we will have to somehow modify our 2023 and 2024 contributions.
Options that I'm aware of:
Additional wrinkle, spouse has ca. $70K in a tIRA so a 'backdoor' needs to factor in the pro rata rule, I believe.
So it looks like we will have to somehow modify our 2023 and 2024 contributions.
Options that I'm aware of:
- Do nothing, pay the penalty, don't do it this way in the future
- Ask Fidelity to undo the 2023 and 2024 spousal contributions entirely
- Ask Fidelity to recharacterize the Roth as a Backdoor Roth (can they do that?)
- Ask Fidelity to recharacterize the Roth as a Backdoor Roth (can they do that?) and also do a Roth conversion on spouse's tIRA for 2023 or 2024 (when can that be dated if it's already 2024?)
Statistics: Posted by CascadiaSoonish — Wed Mar 27, 2024 9:59 am — Replies 3 — Views 173