If the IRS allows a backdoor Roth contribution, why doesn't it just eliminate the income limits for a Roth in the first place? What's the point of requiring the backdoor process if it gets the taxpayer to the same place?
I got a trad ira from an old employer that got rolled over to a trad ira with the broker of my current job. If allowed by current broker to roll the trad ira to 401k, is that a taxable event? How are the investment rolled over? I mean are the investments sold, i got spy in there but i know my 401k does not have that in investment choices 🤔
It won't be a taxable event to roll traditional IRA (pre-tax money) into a 401k (pre-tax money). You ask your new 401k plan administrator to guide you, get the right forms, and tell your current traditional IRA administrator that you intend to (reverse roll) roll your traditional IRA into your 401k plan. They may send you a check which you deposit into your 401k plan. Even if 401k can't take SPY, sell it to cash and buy something similar because that's a non-taxable event. T-IRA and 401k are both tax deferred plans. You pay tax when you withdraw for your use.
If the IRS allows a backdoor Roth contribution, why doesn't it just eliminate the income limits for a Roth in the first place? What's the point of requiring the backdoor process if it gets the taxpayer to the same place?
It’s not a loophole. The IRS actually says you can do this.
Great, thanks. Also useful to convert ira and old 401k to latest 401k to access rule if 55.
Cheers,
What happens if couple makes 300k and can we do backdoor
I got a trad ira from an old employer that got rolled over to a trad ira with the broker of my current job. If allowed by current broker to roll the trad ira to 401k, is that a taxable event? How are the investment rolled over? I mean are the investments sold, i got spy in there but i know my 401k does not have that in investment choices 🤔
It won't be a taxable event to roll traditional IRA (pre-tax money) into a 401k (pre-tax money). You ask your new 401k plan administrator to guide you, get the right forms, and tell your current traditional IRA administrator that you intend to (reverse roll) roll your traditional IRA into your 401k plan. They may send you a check which you deposit into your 401k plan. Even if 401k can't take SPY, sell it to cash and buy something similar because that's a non-taxable event. T-IRA and 401k are both tax deferred plans. You pay tax when you withdraw for your use.