If my IRA grew from $6000 to $6500 by the time I converted it to a Roth, can I still contribute $500
I contributed $6000 to my Traditional IRA this year, and then it grew to $6500 by the time I converted it to a Roth IRA. Does this mean I can still contribute $500 to my Roth IRA, or does the $500 from the money I gained ($6000 → $6500) count towards the $6500 contribution limit? Thanks so much!
Best Answer
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Hello, atrlau!
That is a great question!
The $500 earnings will be taxable upon conversion but do not count toward the contribution limit. You can still contribute another $500.
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Answers
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Great! Thank you so much :)
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Sorry, I have a follow-up question:
Since I already converted my Traditional IRA to a Roth IRA (via backdoor Roth IRA), do I contribute $500 to a Traditional and convert it to a Roth again, or just contribute directly to the existing Roth IRA?
Thanks so much!
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Sorry, I have a follow-up question:
Since I already converted my Traditional IRA to a Roth IRA (via backdoor Roth IRA), do I contribute $500 to a Traditional and convert it to a Roth again, or just contribute directly to the existing Roth IRA?
Thanks so much!
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No worries! That is another great question!
The idea of a backdoor Roth IRA contribution is that your income is too high to contribute to a Roth IRA. Thus, you contribute nondeductible amounts to a traditional IRA and then convert to a Roth IRA to get around the income limits of directly contributing to a Roth IRA.
Thus, if your income is too high to directly contribute to a Roth IRA, you will need to contribute the $500 to a traditional IRA and then convert to a Roth IRA. You can see if your income is too high to contribute directly to a Roth IRA at the IRS link below:
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Great, thanks so much again Alex! I really appreciate your help :)
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