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My wife worked for a few years and had a 403(b) worth about $20k that we rolled over into a traditional IRA. I was mulling over the possibility of moving it to a Roth IRA since I am in my last year of residency and will only have 1 more year of non-attending level salary (I hope). Unfortunately, I don't really want to pay taxes on $20k in income as the budget is a little tight this year, but I also don't want to pay even more taxes on it later when my marginal tax rate goes up. What is a guy to do?
BUT, I heard Dr. Dahle give an awesome suggestion on one of his podcasts that maybe we could open up a solo 401(k) if we had any income on the side and roll the traditional IRA into it (while also opening up the possibility of future backdoor Roth IRA transfers). My wife so happens to be helping out a friend with dog walking and gets paid (a paltry) $25/week.
So I call up Fidelity and asked one of their tax specialists about opening up a solo 401(k) and they replied that I can't just open one up and roll over money into it. Apparently, I was told that it requires regular deposits and that the IRS frequently audits such accounts.
Does anyone have any experience with solo 401(k)s and using them when actual self-employed income is low? I admit my motivation for using it is as a receptacle for the rollover funds from the traditional IRA and we will not likely put much into it in the future. Thanks for any direction!
BUT, I heard Dr. Dahle give an awesome suggestion on one of his podcasts that maybe we could open up a solo 401(k) if we had any income on the side and roll the traditional IRA into it (while also opening up the possibility of future backdoor Roth IRA transfers). My wife so happens to be helping out a friend with dog walking and gets paid (a paltry) $25/week.
So I call up Fidelity and asked one of their tax specialists about opening up a solo 401(k) and they replied that I can't just open one up and roll over money into it. Apparently, I was told that it requires regular deposits and that the IRS frequently audits such accounts.
Does anyone have any experience with solo 401(k)s and using them when actual self-employed income is low? I admit my motivation for using it is as a receptacle for the rollover funds from the traditional IRA and we will not likely put much into it in the future. Thanks for any direction!
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