Humorously (if you have a sick sense of humor) it was because of our newfound interest in our finances that we discovered our 2014 Roth IRA over-contribution mistake while performing an educational review of our already submitted 2015 tax forms (this was after Tax Day 2016).

When to make a backdoor Roth IRA contribution?

The beginning of a new year is typically a busy time for us at Doctors On Debt. Amongst many other tasks, one of the things we try to complete as soon after the new year as possible is making our Backdoor Roth contribution . For the most part, making Roth IRA or Backdoor Roth IRA contributions is pretty straightforward if you follow the directions.

Is it a common mistake to contribute to a Roth IRA?

[Editor’s Note: The following is a post written by a general dentist and a chiropractor that blog as a couple about their journey to get out from under a combined $450k in student loans at Doctors On Debt. Today they’re talking about a common mistake I often see with Roth IRA contributions — over contributing.

What’s the average contribution to a Roth IRA?

Today they’re talking about a common mistake I often see with Roth IRA contributions — over contributing. A pesky $458.33 miscalculation can cause a lot of work! What I love is that it that they found their mistake because they became educated about finances.

Do you pay income tax on Roth IRA contributions?

Contributions to a Roth IRA are made after tax, and money grows tax-free. As long as you follow the rules for Roth IRA distributions, you’ll pay no income tax when you take your money out in retirement. This is in stark contrast to the tax treatment of a traditional IRA and a 401…

What happens to your money when you convert to a Roth IRA?

You don’t have a chance to recover the taxes you paid on your Roth contributions. Here’s what happens when you save in a Roth, either directly or through conversion. You immediately reduce that big pile of money you have to save for your retirement.

Is it bad to contribute to Excess Roth IRA?

Making an excess Roth IRA contribution can be a headache, but it’s not the end of the world. There are ways to fix it, no matter how long ago it occurred. But it’s a lot easier if you just keep an eye on your contributions for the year and try to avoid exceeding the annual limits.