Ask Ed Slott: IRA Tax Implications

Every year, I need to wait until my taxes are calculated before I know if my income will allow me to contribute to a Roth IRA.  If I am over the limit, I do the traditional IRA and immediately convert it to a Roth.  I do not have any deductible IRAs.  My question is - Is there any reason why I shouldn't just automatically do the traditional IRA and immediate conversion to Roth every year, instead of waiting to see I qualify for a straight Roth contribution?  Are there any downsides to this for someone with no deductible IRAs?

Get access to this article and thousands more...

All Financial Planning articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.

Already Registered?

Comments (1)
Thank you, Ed for your advice. You know I should have taken out loans online until payday earlier and that is why I decided to find another solution. Last year I visited finance adviser to help me in some finance question but it costs too much. Also I don't understand how in IRA they calculate the taxes. It seems to me that they do some mistakes during the calculating. And can I recalculate the taxes myself? Thank you a lot.
Posted by Brian S | Tuesday, July 30 2013 at 9:02AM ET
Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.

Already a subscriber? Log in here