The Twelve Days of Taxmas – Backdoor Roth IRA Conversion
As Christmas approaches, Klatzkin is putting a twist on a holiday classic. But rather than filling your head with drummers drumming and golden rings, we’re focused on providing tips through “The Twelve Days of Taxmas” blog series that could help minimize your tax liability.
On the third day of Taxmas, my accountant gave to me a backdoor Roth IRA conversion before they are disallowed in the Biden Administration’s proposed legislation, the Build Back Better Act.
Under current law, if you contribute to non-deductible traditional IRA accounts, you can wait a few days then convert that contribution to a Roth IRA account. Therefore, the only taxable income would be any income earned when the funds were in the Traditional IRA.
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©2021 Klatzkin & Company LLP. The above represents our best understanding and interpretation of the material covered as of this post’s date and should not be construed as accounting, tax, or financial advice. Please consult your tax advisor concerning your specific situation.