Yes you have the procedure correct. At Fidelity, there is a Transfer button. Select the From and To accounts (traditional IRA to Roth IRA) and the amount. It's easy.
Are these steps correct/complete?
I'm also curious about the minimal interest that ostensibly remains between the settlement in the traditional IRA and the transfer to the Roth IRA.
A) Does transferring this additional money to the Roth count as a taxable event? As I understand it, this wouldn't count as exceeding the contribution limit for IRA's ($7,000), correct?
B) Should I keep this amount in traditional until next year's backdoor conversion? Are there any tax implications of transferring this (either now or later) from the traditional to the Roth?
C) Is there a core position that would generate nearly 0 interest during the conversation process?
Thanks! I know this is probably very minute and I'm likely overanalyzing, but I just want to make sure I more fully understand the process before I start.
A) Any interest that is converted is going to add to your taxable income. It might be less than a dollar, so no worries. Conversion is not a contribution, so you're not exceeding any limits.
B) Convert it as soon as you can. The longer you let it grow, the more tax you will pay.
C) I would rather have interest than no interest.
Statistics: Posted by RyeBourbon — Thu Dec 28, 2023 4:23 pm — Replies 1 — Views 129