[USER]

While doing my taxes realized I made too much money to fully fund my Roth IRA. I called vanguard & moved out about $2,000. Can I open a traditional IRA for 2023 with that $2,000 or can I only have either Roth or traditional?

This is the first year I made this much so new to these rules.

Thanks

[Holland]

I’d completely finish your taxes before doing anything. If still over at that point you will have to move it to a traditional IRA, then back into your Roth.

[Christopher]

You can have both. You can put it in the traditional, and then convert it to Roth (this is called a backdoor Roth conversion, used for when you make too much to contribute to a Roth directly).

As long as you don’t have a rollover IRA or traditional Ira balance, this shouldn’t cost you anything tax-wise.

Have you seen: Can married couples contribute twice the Roth IRA limit?

[Sean]

Recharacterizing and doing a backdoor Roth IRA would generally be the best option.

[Author]

Posts