I have recently learned that I can put post-tax money into my 401k each year (up to $53,000 per year, including pre-tax contribution and corporate match) and am pursuing a Mega Backdoor Roth. However, the details are confusing me. I might be able to get help from Fidelity, but would like to make sure that I understand the process myself and thought I would start here....
I have an existing SEP and traditional IRA. I will roll them into my 401k next week. I have no other pre-tax accounts. My understanding is that this step simply needs to occur by Dec 31 of this year.
I have adjusted my withholdings and will max the post-tax portion of my 401k by the end of May (around $26,000). This is the point at which I get confused... Can I move just the post-tax portion of my 401k into a traditional IRA and then convert to a Roth? Can I convert the post-tax money directly to a Roth? Can I do this every year?
My CPA tells me that I am unable to move just the post-tax portion of the 401k and that I'll generate pro rata taxes on my pre-tax 401k. Do I have to temporarily convert my whole 401k to a traditional IRA? I know that there is a way to do this, but I'm unclear, as is my CPA. I think he's ready to punch me.
Help.
I have an existing SEP and traditional IRA. I will roll them into my 401k next week. I have no other pre-tax accounts. My understanding is that this step simply needs to occur by Dec 31 of this year.
I have adjusted my withholdings and will max the post-tax portion of my 401k by the end of May (around $26,000). This is the point at which I get confused... Can I move just the post-tax portion of my 401k into a traditional IRA and then convert to a Roth? Can I convert the post-tax money directly to a Roth? Can I do this every year?
My CPA tells me that I am unable to move just the post-tax portion of the 401k and that I'll generate pro rata taxes on my pre-tax 401k. Do I have to temporarily convert my whole 401k to a traditional IRA? I know that there is a way to do this, but I'm unclear, as is my CPA. I think he's ready to punch me.
Help.
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