Step By Step Backdoor Roth IRA on Vanguard (With Form 8606)
This is a full tutorial of how to do a Backdoor Roth Ira conversion using Vanguard as well as how to fill out IRA Form 8606 which is required for this process.
I will also go over things like the Pro Rata Rule and break down the differences between a conversion and contribution as it applies to IRA accounts. I will talk about how the Backdoor Roth is DIFFERENT than the Roth Conversion Ladder and how the two are different!
🔥Support My Can & Gain Total Access To All My Financial Decisions, Option Plays & Private Discord Chat!
✅INVESTING APPS I USE(Don’t Put Your Eggs In One Basket)
🔥🔥Robinhood:
👉🏻👉🏻M1 Finance:
👍🏻👍🏻Webull:
🕺🏻The Easiest Way To Invest If You Know Nothing!! Invest Your Spare Change From Debit Card Purchases Using Acorns:
🙋🏻♂️Know Your Credit Score!!
🧐Get A Credit Card With NO CREDIT HISTORY:
😮This FREE APP Tracks All My Financing And Investing in ONE PLACE.
👏🏻 Personal Capital!
👉🏻💥CONNECT WITH ME:
🎥Ask Me a Question With A Video Response: heyhe.ro/bradfinn
📞Give Me A Call To Talk Money or YouTube:
💻 Email: TheFinnMindset@gmail.com
🍺BEER MONEY DONATIONS🍺
Venmo:
PAYPAL:
—–
📚Books That Blew My Mind🤯
Get A FREE BOOK with a free trial of Audible!
All You Need To Know About Investing:
On Financial Freedom:
On Fire:
On Debt Domination:
On How The Wealthy Live:
——————————————————————————————————–
DISCLAIMER: The content discussed in these videos are solely my opinion and should never be used as financial advice. This channel is for entertainment purposes only. Make sure to consult with a professional before making money decisions. This video and description contain affiliate links, which means that if you click on one of the product links, I’ll receive a small commission; all of which helps grow the channel! Thank you for your support!…(read more)
LEARN MORE ABOUT: IRA Accounts
CONVERT IRA TO GOLD: Gold IRA Account
CONVERT IRA TO SILVER: Silver IRA Account
REVEALED: Best Gold Backed IRA
Great vid Brad. Question, if my Trad IRA has two years of Post Tax money in it, can I do a Backdoor conversion for all of it to my Roth or just 6k per year? Thanks
So I would deposit $6,000 in the traditional and transfer funds to same Roth every year? Or do I have open a new Roth every year.
Thanks for that, Sir!
Awesome Value here, thank you very much!
sep doesn't have a $6000 limit…
Thanks for posting this video! I have a situation where I made a $12,000(for the years 2021 as well as 2022) non-deductible contribution to a traditional IRA, but waited a few weeks to make the transfer to my Roth IRA and have since earned $0.18 in dividend; therefore the total balance in my traditional IRA is now $12,000.18. At this point can I transfer the entire amount into my Roth IRA or can I only transfer $12,000? What are the options I have here? What should I do about the $0.18? If I can only transfer the $12,000 how does the pro-rata rule impact me for the small amount left? Appreciate any help!
Exactly what I needed – thank you for this step by step tutorial! Your channel is awesome!
Thanks.
Hey Brad, question for you! I had my roth ira set to auto invest at the start of 2022. Realized I will make over the limit this year, so contacted Vanguard to have them move my 2022 contributions into a traditional IRA in prep for the back door. Finally, my question is, now that I have about 1k sitting in the traditional IRA, should I do the back door now for that 1k to avoid paying taxes on any interest, Or do I need to wait until I am able to contribute the rest of the 6k and then do a back door at one time? Appreciate the help!
The stock market is still a fantastic tool for building wealth, however, so it's wise to consider investing even if you don't have much money to spare
Excellent video!!! Thanks for taking the time to show all the steps.
Best video explanation! Quick question, is this something you can do each year meaning just following the same process with both accounts? Meaning you keep same 2 exact accounts and just keep doing "backdoor" into same roth IRA year after year and letting it build?
Exactly what I was looking for a year later. Thank you!
Hi Brad, my wife did a backdoor Roth last year. This year, we received the 1099-R. For
line 1 Gross Distrution, it has $6000. For line 2a Taxable Amount it has $6000.
As I am doing a backdoor roth, should 2a be saying taxable amount of $6K? If so, is the purpose of form 8606 to negate this amount?
Hi Brad, I have a question. Last year, I moved money from my traditional IRA (money that I had from my last employer) to a ROTH IRA. It was around 30K or so. I also did a backdoor Roth($6K) as well. Does this mean I need to pay $30K + $6K in tax as I already had money in my traditional IRA? Thank you in advance.
Very informative and easy to follow. Thank you!
So what if I did the backdoor roth conversion in 2022 for the 2021 tax year? How would I fill out form 8606 differently?
Brad, if I open a traditional ira with vanguard, does the conversion have to be a Roth IRA with vanguard as well? Or can it be with any custodian
beyond helpful sir! I must say this is a sexy video for sure!! haha
When filling 8606 do you need to do two of them for my wife when filling jointly?
Very informational video! Thank you!
If I have SEP IRA, do I have to roll over the whole sum of the SEP or just that year’s contribution before I can do a backdoor Roth?
Hey, How many backdoor Roth conversions can you do in a year?
If I transfer $6k of savings into my Trad IRA between 1/1 – 4/15 and designate it as a contribution for the prior year and then another $6k as a contribution for the current year, can I then backdoor the entire $12k into my Roth? Or am I only allowed to backdoor $6K per year?
You can do this every year, right?
Good explanation however there is a big catch as per the pro-Rata rule. If you have a rolled over IRA (pretax) from a 401k and if you try to covert your separate IRA account that has say $6k then you will have to pay taxes on “rolled over IRA (pretax) from a 401k’ + $6k which could be huge or even move you into a higher tax bracket – IMHO. @Brad Finn can you confirm please?
Hey Brad! My husband and I love your videos. Thanks for all the advice.
We have to do a backdoor Roth and want to know if we should do 2022s like asap before any further progress is made on the bill. Have you done yours? Are you going to wait to see what happens?
Thank you for any help!!! I appreciate you so much. With this video we did our first backdoor Roth last year and you covered every step so thank you thank you!
very helpful.. one of the best videos I've seen on this. thank you Brad!
What if I already have a Roth IRA? And my new incomes exceeds the limit. Can I still do a conversion?
What’s the latest you can create and contribute for 2021?
Ppl have been nothing but a nightmare to deal with.
Thanks for the great video Brad! I'm planning to do the backdoor Roth IRA and your video greatly helps! One question though, can I have both a Traditional IRA AND a Roth IRA moving forward? I have a Traditional IRA for years, and would like to open a new Roth IRA now through the backdoor. Can I open a new, second Traditional IRA, contribute the $6000 to it, then backdoor the amount to the Roth IRA? Will the new Roth IRA have any conflict with my old Traditional IRA as long as my yearly contribution stays within the $6000 limit? Thanks in advance!
heyy sbu
My question in terms of the pro rata rule is, if I have a traditional with $0 in it now, but have a SEP with tax deferred contributions, does the pro rata rule STILL apply if I only contribute the $6k to my traditional Ira (that currently has nothing in it) then convert that to a Roth?
Lastly, if I recall correctly, the SEP Ira does not have a $6k limit as you stated. The maximum contribution is capped at 25% of an individual's compensation. Amazing walkthrough, though. Got a thumbs up from me!
Great video! New subscriber here! Will do this but have quick question: I don't have any traditional IRA but only have Rollover and Roth IRAs. I'm planning to do this Backdoor Roth using money from checking acct. Does my Rollover IRA count as part of the "Pro-Rata Rule" or not?
For the 5 year rule for withdrawal, is it from when you open the account or each monthly contribution?
Dude, you just saved me from a tax bill. I had never heard of the Pro-Rata rule.
Simple IRA contribution limit is $13.5k…
Agree with other commenters here – this was definitely the easiest and most straightforward description of the Backdoor Roth IRA conversion process. Thank you!
Thanks so much for the video! One question – I converted my Traditional to Roth IRA using the instructions in this video, and forgot to check it for a couple days, and now my Vanguard Federal Money Market Fund is at $6,000.02 – should I be worried about being over the $6000 limit? Or should I be okay as long as I buy only $6000 worth of VTSAX (lol I'll be doing the same thing you're doing).Thanks again for this video 🙂
Hi Brad – question fo you. I'm looking to do this for the first time in 2021. I would like to do it now–so that I can make the most of time inn market/investing earlier in the year. (Back when I was able to invest in a Roth directly, I'd make my full contribution in January each year.) However, I always read about people doing a backdoor Roth at the end of the year. Is there a reason for this? Is there an ideal time to do a backdoor roth for the cleanest, simplest, low tax conversion?
Super helpful! Really liked your explanation!
This was super helpful. I assume the process is similar on Fidelity.
If you invest with Vanguard, can the Roth IRA, invest in any Vanguard ETF?