I did so for the first time last year. Background: my employer contributions for our 403b plan go to a separate account that allows employee after tax contributions. By contributing money into the Solo 401k plan, you can convert those dollars to Roth funds. Not if you go directly from 403b to Roth IRA. ... to a traditional IRA and the after-tax portion to a Roth IRA, resulting in a tax-free rollover and conversion. Get them to correct it. Also, should the code be G, not H according to your explanations above? When you make the conversion of $5,500 to Roth, and ~95% of your IRA money is tax-deferred, you will owe income tax on ~95% of the conversion. The 1099B shows no tax withheld with box 1 matching box 5 and box 7 has code G. After I answer yes to contributing on a After Tax basis to my 401k and confirm the amount on the next page my tax owed goes very high. A solo 401(k) plan may have both a bank account and a brokerage account. All Rights Reserved. Thank you for all the advice. Suppose your plan allows it and you executed a mega backdoor Roth. In that case ask your 401k provider whether they can redo your 1099-R to make it a rollover to traditional because they didn’t mention anything about Roth to the receiving end. Backdoor Roth IRA Tax Return Reporting. The earnings portion should be in box 2a. My 1099R does have a zero so it was just me. The backdoor Roth IRA is designed for individuals whose income exceeds the IRS limit for making Roth IRA contributions directly. Shouldn’t box 2a be 400 (10,896-10,496) since earning is taxable for mega backdoor? Confirm that you made after-tax non-Roth contributions to your plan. Mega Backdoor Roth and Access To Your Money Before 59-1/2. : the same way my regular contributions are made, but after-tax (not Roth) – employer sends to 401k administer)? By the time the money was rolled over to a Roth IRA, your contributions earned $200. When you’re reporting a back door IRA, keep these things in mind if you’re using H&R Block’s online program or software: This isn’t a rollover or a recharacterization — it’s a conversion. For more information on Backdoor Roth, see Backdoor Roth: A Complete How-To. If the 1099-R from the 401k provider looks like the one in this post, with a small taxable amount in box 2a and your after-tax contribution in box 5, the 401k provider did it correctly. https://www.irs.gov/forms-pubs/about-form-5498, https://www.irs.gov/forms-pubs/about-form-8606, https://www.irs.gov/forms-pubs/about-form-1099-r, City of Tacoma Employees: Buy-Up Long-Term Disability Insurance Benefit, What Women Need to Know About Working with Financial Advisors | Tip #5, What Women Need to Know About Working with Financial Advisors | Tip #4, What Women Need Know About Working with Financial Advisors | Tip #3, What Women Need to Know About Working With Financial Advisors | Tip #2. Things to Remember About Back Door Roth IRA Conversions. If you import the 1099-R, check the import carefully to make sure it matches your copy exactly. $25k was earnings from those after-tax contributions. This applies to base salary … Withdrawing to a Roth IRA also works. Special Considerations for a Backdoor Roth IRA I’ve read the previous posts on this site regarding mega Backdoor Roth rollovers but I am confused by the pro Rata rule. Box 2b “Taxable amount not determined” should NOT be checked. Hmm, it sounds quite doable. 30, 2020 Published Mar. Line 5b only includes the $200 taxable amount. Now, it depends on who made the mistake and how exactly you transferred the money to your Roth IRA. If I were to roll over now, would the loss be reported on the 1099-r and could be applied to compensate other short-term gains? Report Form 5498, IRA, etc non-deductible Traditional IRA one company another! 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