Any Horror Stories Here Related to Mega Back Door Roth with Self-Managed 401k?

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Topic Author
catchinup
Posts: 656
Joined: Sun Dec 31, 2017 5:35 pm

Any Horror Stories Here Related to Mega Back Door Roth with Self-Managed 401k?

Post by catchinup »

I opened a solo 401k with a discount brokerage around the end of 2019 and started making voluntary after-tax contributions. From what I read, a lot of other members here do the same. I'm interested in hearing any horror stories -- i.e. problems with the IRS, paperwork nightmares, folks here have encountered in the process.

As for me, in 2020 I did my first in service distribution to Roth IRA requiring me to file a 1099-R to myself. I also needed to file a 5500-ez for the first time. While I'm aware the 5500-ez filing requirement is a general requirement (i.e., not specific to 401k plans allowing after tax contributions), I still wonder if it will raise any eyebrows with the IRS when they see in the employee contribution box a number that exceeds the employee tax deferred limit.

So far, I have not had any issues with the IRS, but it's early on. Interested in hearing any problems others have had with the IRS otherwise.
placeholder
Posts: 8375
Joined: Tue Aug 06, 2013 12:43 pm

Re: Any Horror Stories Here Related to Mega Back Door Roth with Self-Managed 401k?

Post by placeholder »

Just to clarify the solo plan was set up with after tax because that doesn't come with the off the shelf plans at most custodians.
Topic Author
catchinup
Posts: 656
Joined: Sun Dec 31, 2017 5:35 pm

Re: Any Horror Stories Here Related to Mega Back Door Roth with Self-Managed 401k?

Post by catchinup »

placeholder wrote: Sun Jun 20, 2021 9:25 pm Just to clarify the solo plan was set up with after tax because that doesn't come with the off the shelf plans at most custodians.
Are you asking about my plan? If so,yes.
placeholder
Posts: 8375
Joined: Tue Aug 06, 2013 12:43 pm

Re: Any Horror Stories Here Related to Mega Back Door Roth with Self-Managed 401k?

Post by placeholder »

catchinup wrote: Sun Jun 20, 2021 11:27 pm Are you asking about my plan? If so,yes.
Looking back at your posts I see that you have a non prototype plan set up.
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