roth 401 conversion
I converted my 401k to a roth 401k in January 2010.I am going to pay the tax on the conversion over 2011 and 2012.Is the whole amount taxed as ordinary income or is there a portion taxed at a lower rate?
I converted my 401k to a roth 401k in January 2010.I am going to pay the tax on the conversion over 2011 and 2012.Is the whole amount taxed as ordinary income or is there a portion taxed at a lower rate?
Permalink Submitted by Alan Spross on Tue, 2011-04-26 23:20
You couldn’t have done an “in plan conversion” prior to 9/27/2010 since the legislation was not passed until then. So the first step is to determine exactly what you did and when.
Perhaps you converted it to a Roth IRA in Jan. 2010 instead of a Roth 401k?
In any event the entire taxable amount is taxed at ordinary income rates. But the taxable amount could be less than the amount converted if you had after tax contributions in the pre tax 401k account. You can tell what the taxable amount is from the 1099R issued.