SEP IRA conversion to Roth IRA
Can a participant convert some or all of their SEP IRA to a Roth IRA while they are still employed by the contributing employer and the SEP IRA is still an active plan?
Can the participant make a non-deductible contribution to a traditional IRA and convert that ND contribution along with the SEP IRA to a Roth IRA?
Permalink Submitted by Alan - IRA critic on Mon, 2014-01-06 19:45
Yes, the participant can do both. The non deductible TIRA contribution can actually be made to the SEP IRA as long as the IRA custodian is informed of the nature of the contribution. The custodian reports SEP and non SEP contributions differently on Form 5498. Conversions done from the SEP or other TIRA account must consider the values of both in determining how much of the conversion is taxable on Form 8606.