Anyone done a backdoor IRA?

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We contributed in excess to the Roth IRA. I was made aware of a way to keep the excess in the Roth IRA by converting it to a traditional IRA and then back to Roth IRA? Confusing for a finance novice like myself...

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Usually a backdoor roth IRA means that you make too much income to make a normal roth IRA contribution, so instead you make a traditional IRA contribution (no income limits there), then convert it to a Roth. The situation is sounds like you are referring to is that you contributed more than the $5,500 per year. I don't think there is any way to legally exceed those contribution limits.

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Usually a backdoor roth IRA means that you make too much income to make a normal roth IRA contribution, so instead you make a traditional IRA contribution (no income limits there), then convert it to a Roth.

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I'm wondering about this process as you've described, if you would be so kind as to elaborate on necessary steps or advice. Thanks.

It's PIIIRSB

Put it in IRS butt

I would keep it simple and make a $5500 contribution to a traditional IRA, convert to Roth, fill out Form 8606 next tax season.

Careful if you have a non-zero balance in a traditional account from previous years.

You need to perform a recharacterization to move the money back to a traditional IRA as a non-deductible contribution. Then you can convert it to a Roth IRA. I did this a few years ago when I screwed up accidentally.

That's a good question... I caught my mistake quickly and the contribution was into a cash settlement fund so I didn't have any capital gains. My thought is that if you recharacterize it, the gains will also be recharacterized back to the traditional. Then when you do the conversion you would unfortunately owe tax on the gains only.

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I'm wondering about this process as you've described, if you would be so kind as to elaborate on necessary steps or advice. Thanks.

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There are multiple threads on here in the past about backdoor roth IRA's. The key is that you need to have a traditional IRA that has zero taxable gains in it. If you have a traditional IRA with taxable gains in it then it gets a lot more complicated. I put a link below to a decent article on the subject. On my scottrade accounts, I fill out what's known as a direct conversion request form to accomplish the transaction.

LINK