Backdoor ROTH IRA | Mark J Kohler | Tax & Legal Tip | 2019

Updated : Sep 13, 2019 in Articles

Backdoor ROTH IRA | Mark J Kohler | Tax & Legal Tip | 2019

I just came in through the back door just like the back door Roth IRA and if you know what the Roth IRA is all about you know how cool it is compared to the traditional IRA but you want to be in the party and Your accountant may tell you that you make too much money to be at the Roth party well That’s what we’re going to talk about today is the backdoor Roth IRA and how you can get in and play in the game All right now why you’ve heard of this problem is because of income limits if you make too much money you cannot contribute to a Roth IRA it starts around 130 grand if you’re single and If you’re married it starts kicking in at about a hundred and ninety grand and so you know it’s awesome tax-free growth tax-free withdrawals That’s why we want to be in the Roth party well if you try to come in through the front door We can’t get there because if you want to get into the Roth but we’re blocked this front door is Closed so I want to talk about two ways to come in the back door and get into the Roth party okay option one is a conversion strategy pretty straightforward pretty easy you probably have heard about it the second method is more of a two-step process So let’s go through this step one option first here’s the beauty of this you can take any old IRA Traditional IRA or any old SEP IRA in fact inside your 401k at work your solo 401k in your small Business you can convert traditional 401k Contributions to Roth Amounts in as much as you want anytime you want before December 31st for that particular year now if it is a 401k conversion to Roth you have to make sure that the 401k plan allows for that call your employer or if your solo 401k owner you might need to modify it but the conversion is pretty Cool, because there is no conversion Income lineage you can convert as much as you want any given year Now the strategy is looking at what bracket you’re in and making sure you don’t convert too much to get into a higher bracket You want to kind of chunk at it that’s the term we use a lot is that you might say well I want to convert some money into Roth so we’re gonna do it in Pieces and parts and get as much to the Roth party as we can over time by chunking at it now the two-step process is really where this backdoor Roth IRA evolved and that is where you make a non deductible contribution that step one you make a non-deductible Contribution to an IRA now you may say Well can I do that yeah you can to any income level see if you make more than 130 grand single 190 mer You start to phase out and you can’t make a contribution to a regular IRA and get a write-off but you can still contribute but why would you do that because on step two you convert it to rot so you’re it’s kind of a cool way to get into the Roth because you make a non deductible contribution which you can do even if you make too much money and then on day two you convert and you convert that contribution over to a Roth This year it’s six thousand dollars and if you’re over age 50 you can do another 1,000 dollars so you your spouse if you’re married make your non-deductible contributions to your IRA and then on day two Convert it to rock well my friends that’s how you get into the party the Roth party is rocking they’re having tax free growth tax free drinks and food and then they get tax-free treatment on the way out the front door That’s why you want to be in the Roth party study up on it keep building your Roth accounts and keep living that American dream Thanks so much for watching that video and I want to be your source for tax and legal strategies it’s hard enough to live the American dream without being out on the web on Google trying to find answers to complex Questions and just click in a mouse hoping you got it right My team and I want to be a huge resource treatment the law firm accounting firm by Education resources on my site please continue to follow these strategies I know the safety thousands now click here if you want to be a part of my newsletter it’s awesome weekly updates and deadlines and strategies and tips Also subscribe to my youtube channel you’ll love it and make sure to click the bell icon so you get a little ping whenever video and finally check out my site Marjorie Kohler comm with all sorts of videos probably 70 plus videos 30 plus hours of content that’ll save you thousands


  • I have a 457 with my employer and will be retiring in 3 years. Is there a way to convert the money into my ROTH tax free when I retire?

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