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re: Paying taxes on a 401K in plan Roth IRA conversion. (converting stock to Roth)
Posted on 2/20/13 at 10:35 am to BOSCEAUX
Posted on 2/20/13 at 10:35 am to BOSCEAUX
Wait, what?
You are having to pay taxes on converting your Roth 401k to a standard Roth?
You mean on the whole amount?
Because the only post tax contributions are your own.
Employer contributions are pre tax and you'll have to pay taxes on that in the conversion.
But only the employer contribution. Not your own. As I understand it.
You are having to pay taxes on converting your Roth 401k to a standard Roth?
You mean on the whole amount?
Because the only post tax contributions are your own.
Employer contributions are pre tax and you'll have to pay taxes on that in the conversion.
But only the employer contribution. Not your own. As I understand it.
Posted on 2/20/13 at 10:39 am to Siderophore
To answer your question though, the taxes would be the same as that much of an increase in income.
So if you make 50k, and you have a taxable conversion of 25k, you'll pay taxes April 2014 as if you made 75k.
If it is an old 401k that is currently not in service, there is no reason (and likely tax preferable) why you can't spread it out by partially converting over a few years.
(If I misread and you put it in a standard 401k, them yes, you have to pay taxes on it all, under the same rules as above.)
So if you make 50k, and you have a taxable conversion of 25k, you'll pay taxes April 2014 as if you made 75k.
If it is an old 401k that is currently not in service, there is no reason (and likely tax preferable) why you can't spread it out by partially converting over a few years.
(If I misread and you put it in a standard 401k, them yes, you have to pay taxes on it all, under the same rules as above.)
This post was edited on 2/20/13 at 10:42 am
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