I'm leaving a former employer who I had a 401k with about $40k in it. I've been reading that it's best to convert it to my IRA which I have with Vanguard, however I use that same IRA to fund my backdoor Roth. Can I have rollover my 401k to my IRA and still do the backdoor? Should I create a separate IRA to rollover the 401k to? Can I rollover the 401k and do a backdoor Roth in the same year? Does having that rollover money in my IRA prohibit me from doing a backdoor Roth in subsequent years?
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Pre-tax balances in all traditional, SEP and SIMPLE IRA accounts are included on Form 8606 Line 6 and will be used for pro-rata tax calculation with any non-deductible basis.
There is no need to rollover the prior employer's 401k to an IRA and would generally be a bad idea if you want to do back door Roths.
Unless the 401k is terribly expensive why not just leave the assets there indefinitely. If you have a new employer plan with decent investment options/costs you likely can rollover directly from the previous to the current employer's plans.
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