Backdoor Roth as an expat?

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Topic Author
Livingstone
Posts: 4
Joined: Wed Mar 25, 2020 6:07 pm

Backdoor Roth as an expat?

Post by Livingstone »

I am an expat in the UK, my salary is about $300k (paid in GBP in a UK bank account, I frequently transfer back to my US account). Currently, I have a Roth IRA account with Vanguard, but since I am using the Foreign Income Tax Credit (as I make too much for the Foreign Earned Income Exclusion), I was wondering if it would be wise/possible to max out a Traditional IRA and then convert it to the Roth IRA? It seems a bit too good to be true, as the way I read it, I would put the money in the Traditional IRA, convert that to the Roth, but because the money is post-UK-taxed money, I would not have to pay taxes during this conversion. I just want to make sure I am not missing something here.

My alternative plan would be to just invest further in Vanguard index funds and leave the IRAs as it is.
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