Chances are if you could get one over on the IRS, you would take full advantage.
I am all about paying the taxes that I owe, but I don’t want to pay more than I have to, if I can legally pay less – I will. 👮
Today on The Wealth Board™ 👨🏫 I am going to share information on the Backdoor Roth IRA.
If you don’t know about the Roth IRA, it is one of the best tools for building wealth. It allows you to accumulate tax free money.
You can only put a certain amount into a Roth IRA each year. As of 2020 if you are under the age of 50 you can contribute $6,000 (add $1,000 if you are over 50).
If you are single and make less than $124,000 (adjusted gross) you can contribute. The IRS starts to phase out on a scale as your income increases.
If your income exceeds the limits set by the IRS you can contribute to a Traditional IRA with a pre-tax deduction.
If you want to take advantage of the Backdoor Roth IRA, you would invest into a Traditional IRA and then convert this to a Roth IRA.
❓Is this something that you think you need to know more about? Do you have something that you want to convert?
✅ Roth IRA Millionaire 💸😎: How to Get Tax-Free Money Explained (2018)
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#TheWealthBoard™ #rothIRA
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3 Blessed be the God and Father of our Lord Jesus Christ! According to his great mercy, he has caused us to be born again to a living hope through the resurrection of Jesus Christ from the dead, 4 to an inheritance that is imperishable, undefiled, and unfading, kept in heaven for you, 5 who by God’s power are being guarded through faith for a salvation ready to be revealed in the last time. 6 In this you rejoice, though now for a little while, if necessary, you have been grieved by various trials, 7 so that the tested genuineness of your faith—more precious than gold that perishes though it is tested by fire—may be found to result in praise and glory and honor at the revelation of Jesus Christ. 8 Though you have not seen him, you love him. Though you do not now see him, you believe in him and rejoice with joy that is inexpressible and filled with glory,
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Write an article about The Greatest Tax Hack Ever? (backdoor Roth IRA explained) in English
Is this something that you think you need to know more about?
Can I put in my 401 fully, and my Roth IRA fully and still do the backdoor IRA. Im confused on the %of tax for the backdoor method
3:01 That's Desi Banks. Check out his videos on YouTube.
form 8606 is what one completes after doing a roth conversion
This could all be so easy if the government just fucked off
It's always about taxes eating away at your retirement…Socoal Security, investments, stocks etc etc….nontaxable bonds hmmmm
Can you buy bitcoin in a roth ira?
Can you "convert" a trad IRA into an existing ROTH IRA that you have created for annual ROTH contributions? Or are you forced to open a brand new ROTH IRA account to handle your "conversions" so they are not commingled with "contributions" from an IRS tax tracking perspective? (i.e. to keep things very clear).
13:02 why haven’t you added more money?
Isn't it great how the government dictates on how you invest and save for the future? Want to know why the government says "no"? Because there is no power in "yes".
At about the 8 minute point, you calculate the taxes. First, I believe you have the outcome backwards; I think the 10% is what is non-taxable, leaving 90% taxable, e.g., taxes would be due on $5400, not $600. Further, I think you have the wrong denominator in your example; I think it should be $66K, not $60K. You have to use the balance after the contribution; $60K + $6K = $66K. So you would owe taxes on 91% (rather than 90%), leaving 9% (not 10%) non-taxed. So you would be paying taxes on the $5454, not $5400 (or the stated $600 in the video). That's why this Backdoors can be really painful!
Hey Jeff If you had a loss in another investment account could you use that to reduce the gain from a 401k to roth IRA convertion?
Would we be able to do this backdoor conversion with an Inherited IRA account? From what I understand, it seems like the only thing we can do with an Inherited IRA is withdraw the funds within 10 years due to the new SECURE Act.
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Jeff, Thanks for the explanation. In your explanation, you told existing or old 401Ks are considered when doing a back door roth Conversion. Did I understand it right? I haven't done ROTH IRA Conversion yet, but wanted to try this year. From reading other blogs, My understanding was that only IRA type account balances are considered when doing a ROTH IRA Conversion. if you do not have any other IRA Accounts but just own 401k Accounts (old or existing) then you can convert your IRA to ROTH IRA without having to pay any taxes no matter how big your 401K Account Balances are.
Could you help re-iterate on this. Are 401K Balances considered when converting IRA to Roth IRA?
Thanks
That’s why I’m sticking to my Roth 401k so I can convert to my Roth tax free yeah buddy
Great Video as always. the only one thing that came to mind and i found the answer maybe someone is also wondering. is when you rollover that old 401k and since it would put you on a higher tax bracket and your current MAGI allow your to contribute to a Roth, let say you made 100k and you roll your old 401k thats also 100k, single file. this conversion doesnt phase you out to contribute that 6000 per year on that Roth IRA. heh although yeah probably the best way to is roll a little at a time if someone doesnt want to pay the high taxes. Learning well from your vids! thanks Jeff!
Backdoor Roth question! Do the funds have to sit in the Trad. IRA until the following tax year before converting to a Roth? Also, is it better to move a lump sum or $6k every year?
Best tax trick: You do not have to pay taxes. Taxation is theft. Lol
I wish I made 124,000 per year!! Sucks being poor so I’m learning some things here!! Thanks