Back door Roth for solo 401(k)
Client retired in June 2024 and became self employed. She set up a solo 401(k) with Schwab and funded it for 2024. She also has an employer 401(k) Plan with pre-tax and Roth contributions. She does not have a Traditional IRA. If she were to convert the solo 401(k) into a Roth, do you include the value of the employer 401(k) plan in calculating the taxable portion of the conversion.
Permalink Submitted by Alan - IRA critic on Thu, 2025-04-24 17:10
No. If the solo K is not a Roth 401k and if the plan did not allow after tax (employee) contributions, the rollover to a Roth IRA would be fully taxable. That said, if she is under 59.5 she cannot distribute any elective deferrals from the plan while still self employed.