Backdoor Roth Conversion: Top 2 Issues You MUST Know!

If you earn too much to contribute directly to a Roth IRA, a backdoor Roth IRA might seem like the perfect workaround. But before you jump in, there are two critical considerations you need to be aware of. 1. Pro-Rata Rule: This rule may impact how much of your Roth conversion gets taxed. If you don't account for it, you may receive an unexpected tax bill. 2. Record-Keeping: Keep detailed records and file the appropriate tax forms to avoid overpaying in taxes. Is a backdoor Roth conversion the right strategy for you? The answer is it depends. Consult with a financial or tax professional for guidance on your unique circumstance and goals. Subscribe to my channel for more helpful videos on retirement and investing: ▶️ @therealpeopleadvisor Need a financial planner? Let’s talk! Book a call with me today: ▶️ www.sensibleportfolios.com Instagram ▶️   / sensibleportfolios   Facebook ▶️   / sensibleportfolios   #retirementplanning #rothconversion #rothIRA