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re: Roth Income Limits and Backdoor
Posted on 1/19/24 at 7:58 pm to LSUFanHouston
Posted on 1/19/24 at 7:58 pm to LSUFanHouston
Wait. I'm confused but definitely appreciate this tread.
I contributed with after tax money $7k in 2020 and 2021. Total of $14k. I always thought, not sure why, that those funds are technically treated like a Roth as it's taxed funds. As such, I've simply left it alone thinking I could pull it tax free at retirement.
Seems that my logic is flawed. That being said, if I wanted to backdoor the full $14k plus gains on it, what am I looking at? Am I hit with this Pro Rata tax that I'm discovering in this conversation?
I contributed with after tax money $7k in 2020 and 2021. Total of $14k. I always thought, not sure why, that those funds are technically treated like a Roth as it's taxed funds. As such, I've simply left it alone thinking I could pull it tax free at retirement.
Seems that my logic is flawed. That being said, if I wanted to backdoor the full $14k plus gains on it, what am I looking at? Am I hit with this Pro Rata tax that I'm discovering in this conversation?
1
Posted on 1/19/24 at 10:35 pm to Nu Iota Prophet
quote:
Wait. I'm confused but definitely appreciate this tread. I contributed with after tax money $7k in 2020 and 2021. Total of $14k. I always thought, not sure why, that those funds are technically treated like a Roth as it's taxed funds. As such, I've simply left it alone thinking I could pull it tax free at retirement.
Sorry man. Not the way it works.
quote:
Seems that my logic is flawed. That being said, if I wanted to backdoor the full $14k plus gains on it, what am I looking at? Am I hit with this Pro Rata tax that I'm discovering in this conversation?
You’ll pay taxes on the gains when you convert. Pretty simple.
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