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TaxWatch: Here’s why you may want to reconsider doing that backdoor Roth IRA conversion

Converting taxable income into nontaxable income is something all taxpayers are eager to do. The backdoor Roth IRA is one of those options — but there are state and federal tax pitfalls to converting money from a traditional IRA or a qualified retirement account (such as a 401(k)) to a Roth IRA.

Taxpayers cannot make any contribution to a Roth IRA if their income exceeds the annually adjusted threshold limits. For 2019, the threshold levels are $203,000 for married filing jointly, $10,000 (no, this is not a typo) for married filing separately, and $137,000 for all other taxpayers. The threshold limits for making a tax-deductible contribution to an IRA in 2019 are $123,000 for married filing jointly, $10,000 for married filing separately, and $74,000 for all other taxpayers.

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