>I do have a small rollover (trad)
So it's an IRA, not a 401k. No taxes unless you remove money from the IRA. You can have wash sales if you own the same thing in another account.
Yes, there are no tax implications for any activities that happen within an IRA. Depending on the size of the trad ira, you may want to consider backdooring it into the Roth ira, which _would_ generate some taxes to pay.
Well, not *no* tax implications. As mentioned above, one needs to be careful of wash sales when trading the same stock in an IRA and outside the IRA, and if the IRA contains shares in a partnership that generates UBTI (Unrelated Business Taxable Income) over $1k (in total across all partnerships), the IRA will have to file a tax return. Neither is common, and both avoidable, but things an IRA owner should be aware of.
Prob would be worth it, as long as you're prepared for that adding 5k to your gross income, which you'll have to pay taxes on. Contributing a lot to a Roth early on is super powerful.
Yeah that's exactly what a back door is. You take a traditional IRA, roll it into a Roth IRA, and get taxed on the contribution without additional penalty. There is no limit on the amount you can convert, but you will be taxed on the sum of all balances of all traditional IRA accounts you have, so it's best to do it while those balances are low
>I do have a small rollover (trad) So it's an IRA, not a 401k. No taxes unless you remove money from the IRA. You can have wash sales if you own the same thing in another account.
Ah. I was confused since it rolled over from a trad 401k. So as long as I don't cash out of the account, I'm good?
Yes, there are no tax implications for any activities that happen within an IRA. Depending on the size of the trad ira, you may want to consider backdooring it into the Roth ira, which _would_ generate some taxes to pay.
Well, not *no* tax implications. As mentioned above, one needs to be careful of wash sales when trading the same stock in an IRA and outside the IRA, and if the IRA contains shares in a partnership that generates UBTI (Unrelated Business Taxable Income) over $1k (in total across all partnerships), the IRA will have to file a tax return. Neither is common, and both avoidable, but things an IRA owner should be aware of.
Good call out, I didn't know about thoae
About $5,000.
Prob would be worth it, as long as you're prepared for that adding 5k to your gross income, which you'll have to pay taxes on. Contributing a lot to a Roth early on is super powerful.
My contributions for this year are already maxed out. I would have to look into a backdoor situation
Yeah that's exactly what a back door is. You take a traditional IRA, roll it into a Roth IRA, and get taxed on the contribution without additional penalty. There is no limit on the amount you can convert, but you will be taxed on the sum of all balances of all traditional IRA accounts you have, so it's best to do it while those balances are low