Back Door Roth Ira Conversion Calculator

As a reference in 2014 you could contribute up to 6 500 a year and if you are 50 or older you could add an additional 1 000.

Back door roth ira conversion calculator. Return to iras faqs. Then move the money into a roth ira using a roth conversion. Free inflation adjusted roth ira calculator to estimate growth tax savings total return and balance at retirement with the option to contribute regularly. An ira is an individual retirement account where you receive a tax break for contributions today but pay taxes on withdrawals in retirement.

More the complete guide to the roth ira. A method that taxpayers can use to place retirement savings in a roth ira even if their income is higher than the maximum the irs allows for regular roth ira contributions. The conversion would be part of a 2 step process often referred to as a backdoor strategy. The conversion is reported on form 8606 pdf nondeductible iras.

A conversion to a roth ira results in taxation of any untaxed amounts in the traditional ira. The roth ira conversion calculator shows you whether it might be worth converting your traditional ira to a roth ira. The calculator takes into account whether you pay your conversion taxes out of ira proceeds or pull them from other sources. Ira and roth ira basics.

A backdoor roth ira allows taxpayers to contribute to a roth ira even if their income is higher than the irs approved amount for such contributions. Contributions are deducted from your income on your tax return. But make sure you understand the tax consequences before using this strategy. Roth conversion calculator methodology general context.

First place your contribution in a traditional ira which has no income limits. It is for directional purposes only. See publication 590 a contributions to individual retirement arrangements iras for more information. Also gain further understanding of roth iras experiment with other retirement calculators or explore hundreds of other calculators covering finance math fitness health and many more.