The Tax Efficient Path to Financial Independence
New Year’s Eve is an important day if you do a Backdoor Roth IRA. Read below to find out why. The Backdoor Roth IRA I’ve written before about the Backdoor Roth IRA. It is a two step process whereby those not qualifying for a regular Roth IRA contribution can qualify to get money into a […]
Can I contribute to a Roth IRA? Can I do a Backdoor Roth IRA? These are two questions I often hear as a tax-focused financial planner. Perhaps you find yourself preparing your 2020 tax return in early April 2021. You have not contributed anything to a traditional IRA or a Roth IRA yet for 2020. […]
Many colloquially refer to the Winter and early Spring as “tax season.” To my mind, that is short sighted. Yes, for most the time from late January to mid-April are when their tax return is prepared and filed. But the most impactful tax work is not tax return preparation — it’s tax planning! Below I […]
The word is out. The Backdoor Roth IRA is a powerful tax planning tool. You may believe that by previously executing Backdoor Roth IRAs, you have planned well and received a great tax benefit while building retirement savings. Is it possible you are mistaken? It is possible you did not complete the Backdoor Roth IRA […]
There are limits to how much can be contributed to traditional IRAs and Roth IRAs. This post describes how excess contributions happen and how to resolve them. Three introductory notes. First, if you find that you have made an excess contribution, you may be well advised to seek professional advice. Second, please don’t panic, but […]
In my last post, I discussed the basics of the Backdoor Roth IRA, which can be a great planning tool for some higher income Americans. But not everyone qualifies for a tax-efficient Backdoor Roth IRA. Recall Jennifer’s case: Jennifer makes too much to qualify to make a Roth IRA contribution in 2022. She contributed $6,000 […]
If you read enough FI blogs, you will eventually come across the term “Backdoor Roth IRA.” This post answers the question “What’s the deal with Backdoor Roth IRAs?” Why Do a Backdoor Roth IRA? Why would someone do a Backdoor Roth IRA? The Backdoor Roth IRA gets money into a Roth IRA in cases where […]