Updated Monday, November 24, 2014 as of 4:29 PM ET

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?

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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
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