ST Alpha - "It is if you don’t already have IRAs. " (Reading a Post)

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In response to "ummm....accountants, is this true? (the text in red)" by ty97

It is if you don’t already have IRAs.

Posted by spamlet Dec 26 '20, 14:38

If you do it won’t work; but for me I rolled everything into my 401(k) and then opened a new IRA to take the contributions. Leave it a couple of days in cash and then do the rollover. No tax.

You have to do a prorata distribution from all of your IRAs when converting to a Roth so if you have one with a lot of gains you’ll pay a lot of tax.

Responses:

I don't have IRAs. I only have my 401K - ty97 Dec 26, 14:40 11
- There's no "Traditional Roth" - there's Traditional (IRA/401k), and Roth (IRA/401k) -- (edited) - Max Dec 26, 14:57 4
  - mine's more of a David Lee Roth IRA -- nm - 🦌sleighformojo🛷 Dec 26, 15:05 3
    - It rocks but never matures? -- nm - David Dec 26, 15:10 1
      - It wears assless jeans. -- nm - loosilu Dec 26, 15:23
    - I thought that was only for people with no dependents. -- nm - Reagen Dec 26, 15:08
- Correct. - spamlet Dec 26, 14:42 2
  - It this something I could do annually? - ty97 Dec 26, 14:42 1
    - I don’t think you need a new IRA. You can leave it as a zero balance at Fidelity. -- nm - spamlet Dec 26, 14:43
- So my plan would be - ty97 Dec 26, 14:42 2
  - As long as you haven’t already taken a deduction for the traditional IRA contribution, yes. -- nm* - znufrii Dec 26, 15:37
  - I think most people suggest leaving it a week or so but I don’t 100% know it’s necessary. - spamlet Dec 26, 14:43

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It is if you don’t already have IRAs.

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