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Old 02-18-2014, 10:27 AM
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solo 401k change to roth solo 401k

I opened up a solo 401k, since I am self-employed, and rolled over the funds from a simple IRA. I then seen where I could change the 401k to a Roth. On my taxes, how do I report that I converted the funds to a Roth solo 401k?



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Old 02-19-2014, 06:29 AM
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Originally Posted by meffoar View Post
I opened up a solo 401k, since I am self-employed, and rolled over the funds from a simple IRA. I then seen where I could change the 401k to a Roth. On my taxes, how do I report that I converted the funds to a Roth solo 401k?
you mean the funds converted to roth solo 401K from the solo 401k , I mean in-plan Roth rollover?? If yea, then, A roth Solo 401K profit sharing contributions must be made in after-tax funds only. The decision to execute an in-plan conversion of 401k money to Roth solo401k is similar to converting a traditional IRA to a Roth IRA. If you expect your tax rate to be higher in the future when you access your funds, you should consider a conversion. The idea is to pay taxes now so no taxes will be due later when the higher rate would apply. An in-plan Roth rollover ,Solo 401k Roth Rollover, is included in income and taxed for the plan year of the rollover, to the same extent that it would be taxed if the rolled over to a R-IRA. Special rules apply for employer securities and loans. net unrealized appreciation in employer securities that are transferred to a designated Roth account in an in-plan Roth rollover will be taxed in the current year. A loan balance rolled over to a designated Roth account will be included in income, adjusted for basis ,as any in-plan Roth rollover assets, but the loan will retain all of its previous provisions. The 10 percent early distribution penalty tax may apply to early distribution on pre-59 ½ distribution.



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