Direct 401k transfer to ROTH IRA
Client currently makes a backdoor ROTH each year. She has a 401k that she would like to transfer to a ROTH IRA and bypass first putting these funds into an IRA.
Everything I read shows a 2 step transfer of the 401k.. to IRA then transfer the IRA to a ROTH IRA.
Appreciate your help.
Permalink Submitted by Alan - IRA critic on Fri, 2020-07-17 16:32
She can do a direct rollover straight to the Roth IRA, bypassing the TIRA. However, if she moved it to the TIRA, made the non deductible TIRA contribution, then converted the entire balance, her taxable income would be the same as it would if she moved the 401k directly to her Roth IRA. So there is no difference in taxes due either way.