华尔街日报关于税的文章，Backdoor Roth IRA

今天华尔街日报的文章提到backdoor Roth IRA conversion，以前投坛也有关于这个话题的讨论，因为1986年的pro-rata rule, 所有税前的IRA账号和税后的钱需要按比例分配，这样转税后的钱去Roth IRA就很麻烦，大家都是怎么样操作的？能不能一次性把Rollover IRA里面的钱转入Roth IRA, 然后当年交税？下面是摘选自WSJ “I WILL be cautious when doing backdoor Roth IRAs

Backdoor Roth IRAs are a clever way for savers to make indirect contributions to Roth IRAs if they earn too much to make direct contributions. IRA contributions can be either $7,000 or $8,000 for 2024, depending on age, and they can be made until April 15, 2025.

But savers doing backdoor Roths should be aware of a potential pitfall: There could be surprise tax bills and complex record-keeping if the saver also has traditional IRAs holding pretax dollars that were deducted going in—as many do.

Say that someone has $100,000 of pretax funds in a traditional IRA and adds $7,000 of after-tax dollars to another IRA this year in order to do a backdoor conversion of it. He can’t, because the rules force him to allocate the $7,000 proportionately between all his pretax and after-tax IRA funds.

As a result, only about $455 of the after-tax funds will go to the Roth IRA. The other $6,545 will be a taxable IRA withdrawal—not what this saver wanted.

In addition, future withdrawals from this saver’s traditional IRAs must also be prorated between pretax and after-tax funds to avoid overpaying taxes.

Backdoor Roth IRA conversions work best for savers who don’t have IRAs holding after-tax funds. In that case, an after-tax contribution can often be rolled into the Roth IRA with little or no tax due.“