Back door ira
Can someone explain how backdoor and mega back door work?
So for backdoor: open ira with fidelity, convert ira to roth ira..should I contribute to ira or wait to convert to Roth IRA first and then contribute after tax dollars?
You contribute after tax money into your IRA then convert. Where else is the money from? It's advice to not have any or very little before tax (deductible) money in your traditional IRA. Because conversion are pro rate between before and after tax money. You will be taxed when converting before tax into Roth. What is the distinction between before (deductible) and after tax (non deductible) traditional ira ? How you declare it at tax time
https://www.forbes.com/sites/ashleaebeling/2012/01/23/the-backdoor-roth-ira-advanced-version/#7a18ddba55ad Read this a few times... Till you understand ever line.
Lol
The limit is 5K a year. Why even bother.
Backdoor: convert IRA to Roth IRA Mega Backdoor: convert after tax 401k to Roth IRA Why do it: Roth allows you to take out earnings tax free at retirement