401k Roll-In and Backdoor ROTH IRA Timing

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401k Roll-In and Backdoor ROTH IRA Timing

Postby yzhang12 » Wed Feb 13, 2013 11:52 pm

I've made a backdoor of $5500 ROTH IRA contribution for 2013 and I have a ($30,000) tIRA that resulted from a rollover from an old employer (I have not rolled this into my employer's 401k yet..so I've made the backdoor ROTH contribution while my basis included the tIRA).

Does timing of the ROTH IRA backdoor and tIRA to 401k Roll-In timing have any impact of my tax basis (e.g., rolling in 401k before I make the backdoor conversion vs rolling in the 401k at 2013 year end)?
If I roll my tIRA into my current employer's 401k before the end of 2013 (effectively eliminating any non-taxed basis), will my tax basis be $5500 or $35500?

Thanks in advance
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Re: 401k Roll-In and Backdoor ROTH IRA Timing

Postby Default User BR » Thu Feb 14, 2013 2:44 pm

yzhang12 wrote:I've made a backdoor of $5500 ROTH IRA contribution for 2013 and I have a ($30,000) tIRA that resulted from a rollover from an old employer (I have not rolled this into my employer's 401k yet..so I've made the backdoor ROTH contribution while my basis included the tIRA).

Does timing of the ROTH IRA backdoor and tIRA to 401k Roll-In timing have any impact of my tax basis (e.g., rolling in 401k before I make the backdoor conversion vs rolling in the 401k at 2013 year end)?
If I roll my tIRA into my current employer's 401k before the end of 2013 (effectively eliminating any non-taxed basis), will my tax basis be $5500 or $35500?

Download a copy of 8606 and work through an example.


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Re: 401k Roll-In and Backdoor ROTH IRA Timing

Postby Duckie » Thu Feb 14, 2013 9:21 pm

yzhang12 wrote:Does timing of the ROTH IRA backdoor and tIRA to 401k Roll-In timing have any impact of my tax basis (e.g., rolling in 401k before I make the backdoor conversion vs rolling in the 401k at 2013 year end)?

As long as the tIRA is empty by December 31st, Form 8606 will show 0 on line 6, so you're fine.

If I roll my tIRA into my current employer's 401k before the end of 2013 (effectively eliminating any non-taxed basis), will my tax basis be $5500 or $35500?

$5,500.

See IRS Form 8606 and Instructions.
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