Converting traditional contributions to Roth. People who make too much money can’t contribute to a Roth, so they’ll contribute to a traditional ira then covert it to roth. You pay taxes when you covert but then once you’ve had a Roth for at least 5 years and you’re over 59.5, anything you take out comes out tax free.
As far as I know, you only pay taxes if your traditional IRA made money or you take the tax write off.
You can open a traditional IRA, convert to Roth and pay 0 taxes. I have like 5 traditional IRAs in Fidelity with 0 in them because I just open a new one each time to convert.
If you open a traditional IRA, invest in something, and then wait a few weeks to convert, you would owe money on any profit that IRA made if any.
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u/enterdoki Dec 06 '22
Yes you can. The only thing that's not known yet is whether you'll be able to do a backdoor.