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Please verify my steps to do Roth conversion 2020
Old 12-31-2019, 10:36 AM   #1
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Please verify my steps to do Roth conversion 2020

I received a lot of good feedback from my earlier thread:
http://www.early-retirement.org/foru...et-101356.html

In order to meet ACA income requirement for a family of 2, I plan to convert $60,000 to Roth IRA in 2020.

I will have no other IRAs and I have one non-deductible IRA remaining. I contributed $16,000 to it with current balance: $26,000. I will convert that to Roth in Charles Schwab, and the income portion should be $10,000. I will close this non-deductible IRA account after that.

I will need to convert another $50,000 from my 401K. It allows partial withdraw. I called Vanguard and confirmed that they could help me to roll that into Roth IRA. I need to create a Roth IRA account there first, and I also need a rollover TIRA as stop over for that $50,000 before it can be converted to Roth IRA. The income will be the full $50,000. After that, I will close the rollover TIRA account.

I will pay all taxes out of my after-tax account.

I wonder if this will allow me to skip the Roth conversion pro-rata rule because by 12/31/2020, I will not have non-deductible IRA nor the rollover TIRA account.
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Old 01-01-2020, 08:28 PM   #2
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Quote:
Originally Posted by fh2000 View Post
I received a lot of good feedback from my earlier thread:
http://www.early-retirement.org/foru...et-101356.html

In order to meet ACA income requirement for a family of 2, I plan to convert $60,000 to Roth IRA in 2020.

I will have no other IRAs and I have one non-deductible IRA remaining. I contributed $16,000 to it with current balance: $26,000. I will convert that to Roth in Charles Schwab, and the income portion should be $10,000. I will close this non-deductible IRA account after that.

I will need to convert another $50,000 from my 401K. It allows partial withdraw. I called Vanguard and confirmed that they could help me to roll that into Roth IRA. I need to create a Roth IRA account there first, and I also need a rollover TIRA as stop over for that $50,000 before it can be converted to Roth IRA. The income will be the full $50,000. After that, I will close the rollover TIRA account.

I will pay all taxes out of my after-tax account.

I wonder if this will allow me to skip the Roth conversion pro-rata rule because by 12/31/2020, I will not have non-deductible IRA nor the rollover TIRA account.
I guess my question is a little unique and specific. It did not generate any feedback. The more generic question is: can I do Roth conversion for a deductible IRA (TIRA) (partially rollover from 401K which my employer allows), and a non-deductible IRA both in full, in the same year?
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Old 01-01-2020, 09:49 PM   #3
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You will still have to fill out F8606 since you are converting a TIRA with non-deductible contributions. Since you will have a 0 balance at yr end, that will simplify things a bit, but you still have to go thru all the steps.
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Old 01-02-2020, 11:42 AM   #4
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Originally Posted by kaneohe View Post
You will still have to fill out F8606 since you are converting a TIRA with non-deductible contributions. Since you will have a 0 balance at yr end, that will simplify things a bit, but you still have to go thru all the steps.
As long as there is a way to enter TIRA to Roth conversion, and non-deductible IRA to Roth conversion in the same year, I can work on the steps.

I also read that if TurboTax question/answer interview does not work well, I can always go to their form section to enter the number directly there. So, we shall see.
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