[Brenda]

My husband has ‘old’ IRAs so we thought we had to convert all the old money first so we stopped making any new IRA contributions. He now thinks he can setup a new IRA account at a different institution and then do a back door Roth (we make too much for a direct Roth).

Any idea if this is valid and what IRS pub might support this?

TIA!!

We realize we have less than 2 weeks to figure this out!

[Heath]

All traditional IRAs are aggregated and treated as one “giant” IRA for purposes of the pro-rata rule.

If the pre-tax balances in the old IRAs are large, I would look into whether you can roll some of those balances into a workplace plan such as a 401k. That would then free you up to resume backdoor Roth IRAs in a future year.

[Philip]

Nope. IRS considers all IRAs to be one. They must be aggregated for conversion calculations.

[Bill]

Sorry, your husband is wrong. You have to add up all the ira balances and they get treated as one.

The work around is to roll the iras back into a current 401k plan.

[Eric]

just set it up at the same institution. the transfer is much quicker. i have like 10 IRA accounts.

[Philip]

It doesn’t matter if you have 10 different traditional IRAs with different institutions. They must all be empty to do a backdoor Roth contribution.

[Author]

Posts