Everything You Need To Know About Backdoor Roth IRA with Jennifer Quire

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Why should physicians in practice consider a Backdoor Roth IRA? Make sure to do it correctly and efficiently to get the greatest benefits.

In this episode of the Finance For Physicians Podcast, Daniel Wrenne talks to Jennifer Quire about the Backdoor Roth IRA. Jennifer is Daniel’s colleague at Wrenne Financial Planning and a fellow Certified Financial Planner CFP®. 

Topics Discussed:

  • When to consider the “back-door” Roth IRA instead of the normal Roth IRA
  • Steps to take to go through the “Back-door”
  • Common mistakes to avoid
  • Step Transaction Doctrine: No multiple steps allowed to circumvent IRS’s rules  
  • What is the pro-rata rule and why is it important to watch out for?
  • Why is the Roth IRA beneficial to physicians and others?
    • Serves as additional option for tax favored retirement savings
    • Provides tax diversification (future tax-free withdrawals)
    • No Required Minimum Distributions “RMD”s required on Roth IRAs
    • Often provides additional creditor protection
  • Verify Form 8606 is included in your federal tax return
  • Verify that line 4b is correct on your Form 1040 (main form in federal tax return)
  • Verbally notify your accountant that you’re funding the back-door Roth IRA
  • Save the Form 5498 (verifies funding) and Form 1099-R (verifies Roth Conversion)

Links & Bonus Content:

Backdoor Roth: A Complete How-To

Backdoor Roth IRA 2020: A Step by Step Guide with Vanguard

Backdoor Roth IRA Ultimate Guide and Tutorial

17 Ways To Screw Up A Backdoor Roth IRA

Step Transaction Doctrine – IRS

Pro-rata Rule – IRS

Finance For Physicians