saltywalden
Confused about dryer sheets
- Joined
- Feb 21, 2021
- Messages
- 6
Hello All, I'm new to the group and will post an introduction in the appropriate forum soon.
I'm looking to get some help from you all regarding the backdoor Roth conversion as I just became aware of its existence and want to take advantage of it but don't want to mess anything up.
My details:
I contribute maximum amount to an employer sponsored (TSP) retirement plan, DW has income but had no access to an employer sponsored plan in 2020. Together we make over the Roth income limit. Here is what I understand I can do, is this correct and is there any reason not to do this:
1. Open a Vanguard traditional IRA and put in $6,000 from my bank account and select that I'm contributing for 2020.
2. Open a Vanguard Roth IRA and immediately convert the $6,000 I just put in the tIRA into my Roth IRA.
3. Do it again for 2021.
Is it that simple? Is there anything I have to do on my taxes at this point other than just not claim the original tIRA contribution. Can DW do the same thing with another $6,000?
It seems too simple to be something I've never heard of until recently so I'm very concerned I'm missing something.
Thank you!
I'm looking to get some help from you all regarding the backdoor Roth conversion as I just became aware of its existence and want to take advantage of it but don't want to mess anything up.
My details:
I contribute maximum amount to an employer sponsored (TSP) retirement plan, DW has income but had no access to an employer sponsored plan in 2020. Together we make over the Roth income limit. Here is what I understand I can do, is this correct and is there any reason not to do this:
1. Open a Vanguard traditional IRA and put in $6,000 from my bank account and select that I'm contributing for 2020.
2. Open a Vanguard Roth IRA and immediately convert the $6,000 I just put in the tIRA into my Roth IRA.
3. Do it again for 2021.
Is it that simple? Is there anything I have to do on my taxes at this point other than just not claim the original tIRA contribution. Can DW do the same thing with another $6,000?
It seems too simple to be something I've never heard of until recently so I'm very concerned I'm missing something.
Thank you!