Been doing a backdoor Roth IRA conversion for a few years, but this is the first time I’ve seen Vanguard’s portal ask to verify and complete a Form W-4R, specifically to “verify your 0% federal withholding election,” before I can convert all the funds from my Traditional IRA to my Roth IRA.
The confusing part is the 2nd section of the W-4R screen, which states:
“Complete this line if you would like a rate of withholding that is different from the default withholding rate.”
I interpreted this as meaning I don’t need to change the default withholding rate of 0%, and thus as optional. However, this is not the case b/c it actually requires me to submit my signature and confirm. If I try to skip the screen, I receive an error message saying:
“You’re unable to withhold federal or state taxes using this process. To continue, you need to enter 0% tax withholding in the Rate of Withholding box on your Form W-4R, then you can come back to complete your transaction.”
Just to confirm that do need to complete the online W-4R and set the withholding to 0%, correct? I haven’t seen this requirement before and was wondering if Vanguard recently added it this year.
Backdoor Roth IRA — Vanguard requiring to fill out W-4R form to verify 0% withholding?
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Posted by stuwbgn16