PFwise.com Monthly Newsletter
Help you make wise personal finance decisions
Hello friends, welcome to the September 2015 PFwise.com Monthly Newsletter! In this issue, we will discuss Backdoor Roth IRA Conversion - 3 simple steps and 2 potential complications.
Backdoor Roth IRA conversion is a tax-smart strategy for high income families. In this newsletter, we will show you how to get it done in 3 simple steps. Also, many people don't realize there are two potential complications associated with backdoor Roth IRA conversion, we will discuss them in great details as well.
Backdoor Roth IRA: 3 Simple Steps
If you don't know what is backdoor Roth IRA conversion and who might benefit from it, this blogpost should give you a clear idea. If you really like this idea, then this blogpost will show you how to get it done in 3 simple steps.
Complication 1. IRA Aggregation Rule
Unfortunately, for some people, backdoor Roth IRA conversion may not be that straightforward, thanks to the IRA Aggregation Rule. For a detailed explanation, along with a numerical example, please read this blogpost.
Complication 2. Step Transaction Doctrine
Step Transaction Doctrine is a legal principle that IRS could apply it to people who "abuse" the backdoor Roth IRA conversion. If you are not a risk taker and don't want to mess around with IRS, you better know about it and read it here.
Thank you for your readership! I hope this newsletter helps you think about backdoor Roth IRA conversion and do it safely.
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