So, I think I understand the backdoor Roth.
- Contribute to a traditional IRA
- Convert the traditional IRA to a Roth
But I’ve seen some articles mentioning you’ll have to pay taxes on the conversion. Here’s my dumb question - shouldn’t you have already paid those taxes?
- For a regular Roth contribution, you contribute post-tax (and gains/withdrawals are untaxed)
- For a traditional contribution, you contribute post-tax, then deduct the contribution to get the tax refunded (and gains/withdrawals are taxed)
- So for a backdoor Roth, can’t you just skip the traditional deduction and consider the taxes paid?
Thanks!
Submitted November 25, 2020 at 12:25AM by cauthon https://ift.tt/2HzoZdt
