Traditional IRA的pre-tax money会在做backdoor时因pro-rata rule产生收入税。一种减小影响的方法是尽量不要往traditional IRA存入pre-tax money。在存入non-deductible contribution后,可能会在做backdoor第二步前产生earning。上面的例子中,就有1k pre-tax earning。在rollover到Roth IRA时也会按比例产生收入...
Step 1 is necessary because if you didn’t do it, your conversion will be taxed by the percentage of pretax money in all IRAs (the “pro-rata rule”). Money in employer sponsored plans doesn’t count in the pro-rata rule. Step 5 – Report on your tax return Since you made a non...
You do yourself a big favor and avoid a lot of confusion by doing your contribution for the current year and finishing your conversion during the same year. I call this a “planned” Backdoor Roth or a “clean” Backdoor Roth — you’re doing it deliberately. Don’t wait until the fol...
Mega Backdoor Rollover 就是把你的 Post-tax 401k 里付过税的 Contribution 存到 Roth 401k 或者 个人的 Roth IRA,这样利得也不用交税了。 Fidelity 网站上无法操作这种 Mega backdoor,必须打电话 800-835-5095。这个号码是 Workplace 部门,也就是管理 401k 的部门。401k 和 IRA 在 Fidelity 内部是两套人马...
Mega backdoor源于退休人士支取401(k)时采用的partial rollover。券商在收到员工从401(k)中取钱的申请后,会按照401(k)的pro-rata rule向员工寄两张支票,一张的数额是pre-tax,一张的数额是after-tax (after-tax的basis部分,也可包括Roth 401(k))。券商的这两张支票的pre-tax/after-tax不具备法律意义。作为...
Rolling the Mega Backdoor Roth funds into an existing Roth IRA account where the five-year rule has already been satisfied can help simplify and accelerate access to penalty-free withdrawals. Now let's look at an example. Example of a Penalty-Free Withdrawal from a Mega Backdoor Roth IRA ...
distribution to the Roth is done pro-rata, based on the total of all IRAs, and some of the distribution is taxable each year, and a basis of post-tax money remains with the rest of the IRA money each year. In this case, the basis will build each year a backdoor conversion is done...
2) Regarding the pro-rata rule for Roth conversions, does the mix of pre and post tax contributions include both 401k and IRAs or is that separate? 3) If I receive a 1099R for the automatic in-plan conversion to Roth in my 401k, this represents any earnings from the time the after-...