这个Pro-rata rule呢,就是为了防止大家只convert after-tax to Roth IRA然后把pre-tax 的继续留着。 根据IRS Notice 2014-54里的解释 'If a participant’s account balance in a planqualified under § 401(a) or in a § 403(b) plan includes both after-tax andpretax amounts, then, under § ...
There's a pro rata rule for backdoor Roths The IRS requires rollovers from traditional IRAs to Roth IRAs to be done pro rata. Here's how it works: When determining your tax bill on a conversion from a traditional IRA to a Roth IRA, the IRS is going to look at all of your traditio...
The article offers advice on how to convert a new non-deductible individual retirement account (IRA) to a Roth IRA at little or no tax cost even if an individual has an existing pre-tax IRA. Cosidering the pro-rata rule, it suggests rolling a pre-tax IRA dollars into a 401(k) and...
#4 Not Knowing the Pro-Rata RuleNow we're starting to get into where you're actually breaking the rules. Line 6 of IRS Form 8606 (the form on which the Backdoor Roth IRA is reported) requires you to list the total you have in traditional IRAs, rollover IRAs, SIMPLE IRAs, and SEP-...
即after-tax basis rollover至Roth IRA,而pre-tax earning rollver至401(k) plan中的另一子账户pre-tax 401(k)。仅以mega backdoor而言,目的地pre-tax 401(k)也可以换成traditional IRA。但因为高收入人士往往同时做backdoor(以traditional IRA为跳板的backdoor Roth)。为应对traditional IRA的pro-rata rule,在...
1) Do I need to consider the pro-rata rule which factors in my pre-tax IRA funds into the calculation? 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?
This is where things can get messy for backdoor Roth IRAs. If done correctly, a backdoor Roth IRA is a non-taxable event, but this can be a big “if.” IRS pro rata rule The reason backdoor Roth IRA taxes get complicated is the IRS’s pro rata rule for IRA conversions. Under thi...
An inherited IRA doesn’t count if you keep it separate as an inherited IRA (seeInherited IRA and Roth Conversion Pro-Rata Rule). Everything in the traditional IRA, SEP-IRA, and SIMPLE IRA, except any non-deductible contributions you made in the past, is pre-tax money. For example if ...
即after-tax basis rollover至Roth IRA,而pre-tax earning rollver至401(k) plan中的另一子账户pre-tax 401(k)。仅以mega backdoor而言,目的地pre-tax 401(k)也可以换成traditional IRA。但因为高收入人士往往同时做backdoor(以traditional IRA为跳板的backdoor Roth)。为应对traditional IRA的...
then most of the funds and investments that you convert to a Roth IRA likely will count as taxable income at the time of the conversion. That could kick you into a higher tax bracket that year; however, you may not have to pay tax on all the money; apro-ratarule applies to prevent...