Tad Borek wrote:
> Default User wrote:
> > I certainly could withdraw it, but I don't want to. The goal is to
> > get it into a different tax-advantaged account with better options
> > than the company 401(k).
>
> Brian, you should research a recent IRS Notice, 2008-30. At least one
> commentator says that it implicitly allows you to rollover ONLY the
> after-tax part directly into a Roth IRA
That's an interesting take. I'll find that notice and review it.
> In the past if you two-stepped it, meaning 401k to IRA, then
> converting all or part of your IRA(s) to a Roth, the tax treatment
> was different. You'd need to add up all your IRA values, and figure
> out the percentage that is after-tax money...let's say it's $30k in
> IRAs, $10k is after-tax contributions. Only 1/3 of every dollar
> converted to a Roth would be after-tax money, regardless of which
> account the money came from.
I don't have any other TIRAs. The partial nature of the conversions had
me concerned, which is why I was considering only doing a rollover of a
size where I could handle all the taxable ****tion at once. Handle in
terms of not moving myself up a tax bracket. Covering the tax isn't too
much of a concern, I just don't want to pay more than is necessary by
sliding up a bracket.
> But using the 401k-to-Roth provision you could convert the full $10k,
> and only the full $10k, without incurring federal income tax. I don't
> know if all states follow this as well.
Yes, I see. I don't know what MO would do.
> One other thing mentioned in the notice...plan administrators need to
> honor requests to rollover directly to a Roth IRA.
Will they? What's the difference from their standpoint? Sending two
checks to the receiving institution?
Brian
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