Are backdoor roths still available next year?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It says, in relevant part, "When it comes to Roth IRAs, you may not contribute to one next year if you make more than $161,000 for singles (up from $153,000 currently) and $240,000 (up from $228,000) for married couples filing jointly."

This is for direct Roth contribution. Backdoor Roths are still available with no income limit.

This is just so crazy to me. We make around 500-600k\yr and do a 25k Roth conversion each year in addition to our maxed out and employer contributed 401k. Crazy that someone who makes way less than me is cut off.

How do you do a $25k Roth conversion each year, in addition to a maxed out 401k? We do a backdoor Roth, but have always stayed within the IRA max contribution limit each year (in 2023, $6500p or $13k total).

Roth conversions from a tax-deferred account (401K or traditional IRA composed of pre-tax monies) are unlimited in amount and frequency.

Backdoor Roth is done with post-tax monies and those are limited to the annual IRS prescribed amount.

https://www.investopedia.com/roth-ira-conversion-rules-4770480

Note: the PP who does a $25K Roth conversion each year has to pay taxes out-of-pocket on that conversion. Essentially, $25K is added to their annual income and can potentially bump them up to a higher tax bracket. So it's not costless transaction. This is why people do Roth conversion when they are unemployed or when the stock market stinks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It says, in relevant part, "When it comes to Roth IRAs, you may not contribute to one next year if you make more than $161,000 for singles (up from $153,000 currently) and $240,000 (up from $228,000) for married couples filing jointly."

This is for direct Roth contribution. Backdoor Roths are still available with no income limit.

This is just so crazy to me. We make around 500-600k\yr and do a 25k Roth conversion each year in addition to our maxed out and employer contributed 401k. Crazy that someone who makes way less than me is cut off.

How do you do a $25k Roth conversion each year, in addition to a maxed out 401k? We do a backdoor Roth, but have always stayed within the IRA max contribution limit each year (in 2023, $6500p or $13k total).

Roth conversions from a tax-deferred account (401K or traditional IRA composed of pre-tax monies) are unlimited in amount and frequency.

Backdoor Roth is done with post-tax monies and those are limited to the annual IRS prescribed amount.

https://www.investopedia.com/roth-ira-conversion-rules-4770480

Note: the PP who does a $25K Roth conversion each year has to pay taxes out-of-pocket on that conversion. Essentially, $25K is added to their annual income and can potentially bump them up to a higher tax bracket. So it's not costless transaction. This is why people do Roth conversion when they are unemployed or when the stock market stinks.

Or their employer allows them to do a mega backdoor Roth through their 401k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It says, in relevant part, "When it comes to Roth IRAs, you may not contribute to one next year if you make more than $161,000 for singles (up from $153,000 currently) and $240,000 (up from $228,000) for married couples filing jointly."

This is for direct Roth contribution. Backdoor Roths are still available with no income limit.

This is just so crazy to me. We make around 500-600k\yr and do a 25k Roth conversion each year in addition to our maxed out and employer contributed 401k. Crazy that someone who makes way less than me is cut off.

Crazier than the fact that every person earning less than $160,000 pays a greater percentage of their income to social security than you and everyone else earning more does?

+1, the regressive payroll tax on waged workers is crazy.

and Federal government has created special visas that allow companies to hire temporary labor and NOT pay payroll tax on these employees, effectively making hiring of foreign workers CHEAPER than hiring US citizens. Big Tech love this. Democrats love this.

when will our own gov focus on helping US workers first?

https://blog.myrawealth.com/insights/students-on-an-f1-visa-dont-have-to-pay-fica-taxes

and it gets even more "humorous" . In general, non-US citizens employed in the United States are required to pay FICA taxes. However, those with single intent (i.e. expected to return back to their home country post their intended purpose in the US), or non-immigrant status (or F1 visa holders) are exempt from FICA taxes.

yeh right, as if these students return home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It says, in relevant part, "When it comes to Roth IRAs, you may not contribute to one next year if you make more than $161,000 for singles (up from $153,000 currently) and $240,000 (up from $228,000) for married couples filing jointly."

This is for direct Roth contribution. Backdoor Roths are still available with no income limit.

This is just so crazy to me. We make around 500-600k\yr and do a 25k Roth conversion each year in addition to our maxed out and employer contributed 401k. Crazy that someone who makes way less than me is cut off.

How do you do a $25k Roth conversion each year, in addition to a maxed out 401k? We do a backdoor Roth, but have always stayed within the IRA max contribution limit each year (in 2023, $6500p or $13k total).

sorry i wasn’t clear. seems i created a lot of confusion. for years my employer has offered a mega roth. also misspoke, it is now up to 30k annually.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It says, in relevant part, "When it comes to Roth IRAs, you may not contribute to one next year if you make more than $161,000 for singles (up from $153,000 currently) and $240,000 (up from $228,000) for married couples filing jointly."

This is for direct Roth contribution. Backdoor Roths are still available with no income limit.

This is just so crazy to me. We make around 500-600k\yr and do a 25k Roth conversion each year in addition to our maxed out and employer contributed 401k. Crazy that someone who makes way less than me is cut off.

Crazier than the fact that every person earning less than $160,000 pays a greater percentage of their income to social security than you and everyone else earning more does?

i’d be happy to pay in more if that meant i got to collect more.