Personal Finance & Money Asked on March 11, 2021
Let’s assume this simplified case:
In both cases the result is that I have 7k$ in the IRA Roth, and pay no taxes:
it seems there is little if any difference between the two. Or I am missing something?
[I understand that the direct contribution to IRA Roth has income limits, whereas the detour through the IRA works for anyone. Let’s ignore this limit here.]
Does the answer change if the IRA was not empty, but contained pre-tax money from previous years? I guess yes, because the IRA contribution gets ‘mixed’ with the existing pre-tax money before it gets converted; a recharacterized direct IRA Roth contribution bypasses this mixing?
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