surf n turf
Dryer sheet wannabe
- Joined
- Jan 11, 2012
- Messages
- 15
It's a good problem to have I guess. G/f has recently taken a new job that has an income that is above the Roth income limit. She has already contributed $846.08 to her Roth account. Her salary is set at 120k and she will bonus approx. another 8k. I'm not sure exactly what to do here.
At first I thought we should just keep contributing to Roth to see where she ends up for income at the end of the year and then recharacterize her contributions to Trad IRA and then backdoor Roth. Now I'm thinking that we should just start contributing to the Trad(after tax) and then backdoor Roth before 2017 taxes. Recently just read some info about how having an existing Trad IRA might cause some issues due to already having a "sizeable" amount accumulated from past companies' rollovers. So I'm a little lost and I'd rather get my advice here before I call up a Vanguard specialist as I trust the advice here more based on the experiences I've had so far with Vanguard.
Here are the numbers:
120k salary w/ good potential of another 8k in bonuses
$102,841 currently in Trad IRA from past rollovers
$846.08 currently contributed so far for '17
From what I understand there is a phase-out period between 118-133k for Roth but not sure how the total amount allowed to contribute is calculated. I want to do it the easiest way possible that will not expose any of the prior Trad IRA to taxes or have to pay any sort of penalty for contributing to Roth while above the income limits. Sorry but the explanations online were not clear to me to easily understand what our best option is.
Thank you.
At first I thought we should just keep contributing to Roth to see where she ends up for income at the end of the year and then recharacterize her contributions to Trad IRA and then backdoor Roth. Now I'm thinking that we should just start contributing to the Trad(after tax) and then backdoor Roth before 2017 taxes. Recently just read some info about how having an existing Trad IRA might cause some issues due to already having a "sizeable" amount accumulated from past companies' rollovers. So I'm a little lost and I'd rather get my advice here before I call up a Vanguard specialist as I trust the advice here more based on the experiences I've had so far with Vanguard.
Here are the numbers:
120k salary w/ good potential of another 8k in bonuses
$102,841 currently in Trad IRA from past rollovers
$846.08 currently contributed so far for '17
From what I understand there is a phase-out period between 118-133k for Roth but not sure how the total amount allowed to contribute is calculated. I want to do it the easiest way possible that will not expose any of the prior Trad IRA to taxes or have to pay any sort of penalty for contributing to Roth while above the income limits. Sorry but the explanations online were not clear to me to easily understand what our best option is.
Thank you.