It's that time of the year again when I come back to BC for this thread
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Originally Posted by iDumb
6. Report it during filing tax: form 8806. Keep track of the year as there are two separate things: one is contribution, another is conversion.
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Form 8806 has to do with changing capital structure of the corporation. Is this the correct form? if so do you need to convert the monetary amount to stocks?
Quote:
Originally Posted by iDumb
1. No. SEP IRA is an IRA that has pre-tax money. You need to roll that over to your 401k before you can do a conversion from traditional to roth. Otherwise you will be subject to pro rata rule and will end up owing taxes on some portion of money in ur sep ira. I know u probably wrote it by mistake but the term needs to be clear not to make any mistakes. You would be doing a convertion not roll over of a traditional IRA (that u funded with non deductible fund due to ur high income) to a Roth IRA. The process is called a backdoor roth. There is no such a entity as backdoor roth. It's simply roth ira.
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If you have separate 401K and SEP accounts, and want to convert only the SEP account to Roth IRA, will you be able to maintain both accounts separately?
From what I understood you'll have to roll over the SEP account into 401K and then convert 401K to Roth IRA. So you will no longer have 401K. Is that what you're doing?