Reply to How exactly do you make back door Roth contributions?

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[quote=Anonymous][quote=Anonymous]+1 i was just thinking the other day that i need a step by step guide for this. I don’t understand- are you supposed to convert once a year? Once opportunistically? [/quote]

I do it every year in January.  Make the traditional IRA contribution on a Monday, it settles on Tuesday, on Wednesday I do the conversion of the full amount to the Roth, it settles on Thursday and I put it into my (already existing) Target Retirement fund.  It's very easy at Vanguard.

https://www.physicianonfire.com/backdoor/

You will get the appropriate tax forms at the end of the year.  It is a bit confusing because you have to show the traditional IRA contribution as well as liquidating it (for conversion), and that's an option on the tax software- there is an "exceptions" box checked on the form that allows you to indicate that the liquidation happened for conversion purposes.  That way the tax software flags the original contribution as not tax deductible, and also flags the liquidation as not penalized.  The system kicks out a few forms but the net tax impact is zero.  Last year I had a few dollars of gains because of the couple of days pause between contribution and conversion, so that got taxed.

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