Did something change this year with Backdoor Roths? My wife and I collectively contributed $13,000 to Traditional Roths and immediately converted it to Rothy IRAs. The CPA came back today saying that $13,000 is a taxable amount. I thought you only owed taxes on the earnings generated while your money was in the Traditional account, which was $0 for us.
I don’t know how a serious argument could be made? Weren’t some of those stocks essentially squatting on domain names?
That preceded all of the brand new COVID investors. A million new retail investors with way too much time on their hands to play the market who wondered whether investing was always that easy. That lasted for about six months.
Your CPA should be able to easily explain why they’re saying that or what you may have done wrong. Assuming you have a typo in that you actually contributed to a traditional IRA, which was then converted, that’s all still fair game. Your CPA may be saying that IRA contribution isn’t deductible, but that’s different than having to pay taxes on a contribution. You may also have to deal with the Pro Rata Rule, but again the CPA should be able to explain this.
Get an explanation for why they are saying it's taxable. Based on what you're saying it should not be.
https://www.cbsnews.com/news/retire...ent-age-blackrock-larry-fink/?ftag=YHF4eb9d17 Billionaires: The system is broken!
K1 question for any CPAs out there. I received a “draft” K1 which will be all I have prior to April 15th. The details show my ordinary (6a) and qualified dividends (6b) to be the exact same amount. However, I only received the listed amount once so I am concerned the report is double dipping the money earned into my return. Do 6a and 6b add up separately within the return?
Understanding this then, I should be taxed at the qualified dividend tax rate, not ordinary. Is that correct?
I’ve over contributed to my Roth last year. I got a new job that bumped me out of the income limits and my 900 that I contributed is now too much. What do I do
I would call the customer service for whatever institution the account is in. This happens pretty often and should be easy to clean up with their help. I wonder if you also wouldn’t be able to re-characterize it as a traditional IRA, and then backdoor it right back to a Roth if you don’t already have other assets in a traditional IRA.
Recharacterize it as a traditional contribution and backdoor it to a Roth if you can. Just do it before 4/15.
Can I throw it into a work plan? I’ve got an old one I rolled over into a vanguard trad ira when I left
You can recharacterize it to a traditional IRA contribution and you’ll be fine. Alternatively you could just withdraw it and you’ll just owe tax on any earnings. If you want to do a backdoor Roth with the contribution though you’d be subject to the pro rata rule and some or all of the contribution would be taxable when converted since you have a traditional IRA with a balance.
Tax related but I did our taxes on Sunday. My wife's employer for some reason only withheld 3% for federal taxes. I've had to explain selecting 0 or 1 as dependents shouldn't make this big of a difference. She makes $68k/year and only withheld $2.5k in 2023 and now I need to write a check to cover the difference. Fun stuff. I told her to take to her payroll people. We have 1 kid and she is claiming him but any other reason you guys can think of why a payroll dept would withhold so little? I'm not sure how that is determined on paycheck level.
Doing some quick back of the napkin math her W-4 might be filled out incorrectly indicating MFJ but that she has the only job instead of you both having jobs. $68k - $27.7k MFJ standard deduction = $40.7k taxable income x 12% = $4,884 tax - $2k child tax credit = $2,884 net tax.
I've gotten that i need to withdraw 1400 with the excess and earnings from the roth and move into the new ira. does it matter that that excess contribution wasn't in one lump sum and was in monthly deposits of $100.
Nope, makes no difference. If both the Roth IRA and traditional IRA are with the same institution it should be a fairly easy process if you contact them.
I deal with payroll for a couple companies and it's been a problem for a couple years not but from what I understand, IRS last couple years has made an attempt for people not to get big refunds and for withholdings to be more accurate. It's messed up a lot of peoples withholdings though, just have them change everything to zero and track it, you might still need to do extra withholdings if you don't want to come out of pocket end of year.
There are some not so bad numbers in the report at first glance. I don't know how the fed can control things like auto insurance, medical costs, and apparel which are driving numbers.
Thought the higher mortgages were a part as well, which less supply and declined but steady demand would drive higher. And that's with a 7% interest rate driving payments up.
Wife's company changed HR providers last year and somehow withholding got screwed up, specifically she withheld like $100 or something. We owed $11k to the government. That was a fun check to write.
I like Robinhood because of ease of use. I don’t do anything complicated with it though, and I recognize that some people have gripes dating back to GME. I’ve considered getting the credit card they’re offering now
Got a lil raise at work Tweaked W4 and 401k contribution so that my take home net pay only changed by about 10 bucks. This is the way
why would Schwab web site say today April 13th I missed the deadline to contribute to an IRA for 2023?
I just can’t bring myself to move from vanguard for a one-time 3% bump. But it’s probably a fine decision. it’s also fine to constantly chase sign up bonuses by signing up for new checking accounts that have sign up bonuses. But I’m not doing that either.
You have until April to contribute to the previous years IRA. You have from 1/1/24-4/##/25 to make your 2024 contributions.