Submitted by iguesswhatevs t3_11ec2gd in personalfinance
plowt-kirn t1_jad8m80 wrote
> Edit: what if I just put it into my personal Roth IRA since the taxes have already been taken? And then select 2022 rolll over instead of 2023 contributions? Can I do that?
I don't recommend doing this. For one thing, it probably doesn't make sense to do a Roth conversion unless you are in a particularly low income year.
For another thing, even if you do decide to do a Roth conversion, it's better to pay the taxes from pocket rather than an IRA withholding. IRA contributions are limited and you are reducing future growth by dipping into your IRA to pay the taxes. And if you are below retirement age, withdrawing from your IRA to pay taxes is actually a non-qualified withdrawal and you'll be penalized for that.
The easiest thing to do is to roll the entire amount into a Rollover (Traditional) IRA, including the amounts that were withheld for taxes and penalties. If you decide to do a Roth conversion at some point down the line, make that a separate distinct decision.
Viewing a single comment thread. View all comments