Submitted by Livids-Pomegranate t3_10q7xgi in personalfinance
sciguyCO t1_j6oeb9p wrote
>Do I have to wait until next year to do convert over?
You are allowed by the IRS to do as many Roth conversions as you want during a given year, and for any amount individually / in total. You only report once for the total amount for the year on your 2023 tax return (filed next year), if that's what you came across?
I suppose whatever particular brokerage you have your IRA with could be more restrictive, but I can't think of any reason they would be.
>If I wait until next year, can it still fall under the 2023 tax year given it will be 2024 next year.
There are two pieces you're dealing with, with separate reporting requirements. First is your contributions, which go onto the tax return for the year you contributed for (even if the calendar date of the deposit is in the first few months of the following year). The conversion gets reported on the return for whichever calendar year you executed it.
>Additionally, does the interest earned on my current balance count towards the 6500 max 2023 amount.
No. Only new money going from your regular bank account into the IRA counts towards that max. Once contributed (which only counts what you're putting into the Traditional IRA, not the later conversion), the money you shift around between IRAs no longer matters for that limit. So any interest/growth that happens inside the IRA doesn't count against your $6500 allowed. However, if it happens before you convert into your Roth, that would result in some of what you convert being taxable (whatever interest accrued).
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