I will do a Roth conversion in December 2023 for the first time and appreciate help to be sure I am doing this correctly.
Early next week I plan to convert $40,000 from my Fidelity Rollover IRA to my Fidelity Roth IRA. My state (CT) has a mandatory state income tax withholding* of 6.99% ($2,796) plus I would like to withhold Federal income tax of $1,500 from the TIRA distribution. The plan is to use Taxable savings of $4,296 such that the full $40,000 is converted to the Roth IRA.
1) Does Fidelity allow an online in-kind $40,000 Roth conversion or do I need to do this by phone/form upload with a customer service rep?
2) The Fidelity app allows me to make a mobile deposit (using a Taxable account check) of $4,296 into the Roth IRA and select “rollover” as a deposit source. Is this considered an indirect rollover subject to the one-indirect-rollover-per-365 day rule?
3) Depending on the answers, above, is there any issue if I do a 2nd Roth conversion to top off the conversion amount in late December? Specifically, would making a 2nd mobile deposit to the Roth IRA from a Taxable account in the amount of the Roth conversion #2’s tax withholdings run afoul of the 365-day rule, if it applies?
Thanks for your help.
* As this is a “non-periodic” TIRA distribution, there is a CT form W-4P that I can submit to Fidelity instructing them to withhold $0 CT taxes. However I think this makes the process a manual one and I’m not sure how long it will take to process the Roth conversion at this busy time of year. So if I can skip the form, that’s good.
Early next week I plan to convert $40,000 from my Fidelity Rollover IRA to my Fidelity Roth IRA. My state (CT) has a mandatory state income tax withholding* of 6.99% ($2,796) plus I would like to withhold Federal income tax of $1,500 from the TIRA distribution. The plan is to use Taxable savings of $4,296 such that the full $40,000 is converted to the Roth IRA.
1) Does Fidelity allow an online in-kind $40,000 Roth conversion or do I need to do this by phone/form upload with a customer service rep?
2) The Fidelity app allows me to make a mobile deposit (using a Taxable account check) of $4,296 into the Roth IRA and select “rollover” as a deposit source. Is this considered an indirect rollover subject to the one-indirect-rollover-per-365 day rule?
3) Depending on the answers, above, is there any issue if I do a 2nd Roth conversion to top off the conversion amount in late December? Specifically, would making a 2nd mobile deposit to the Roth IRA from a Taxable account in the amount of the Roth conversion #2’s tax withholdings run afoul of the 365-day rule, if it applies?
Thanks for your help.
* As this is a “non-periodic” TIRA distribution, there is a CT form W-4P that I can submit to Fidelity instructing them to withhold $0 CT taxes. However I think this makes the process a manual one and I’m not sure how long it will take to process the Roth conversion at this busy time of year. So if I can skip the form, that’s good.
Statistics: Posted by HomeStretch — Sat Dec 16, 2023 8:53 am — Replies 2 — Views 111