Steps involved in converting voluntary after-tax solo 401k funds to a Roth Solo 401k
STEP 1: Open the Voluntary After-Tax & Roth Solo 401k Holding Accounts (bank or brokerage accounts); NOTE: if each participant (e.g., both spouses) are participating in the solo 401k and each plan to process the in-plan conversion, each will need to open a separate Roth solo 401k holding account.
if you have NOT already completed step 1, CLICK HERE.
STEP 2: Make the voluntary after-tax solo 401k contribution
CLICK HERE if you have NOT yet made voluntary after contribution.
If you have already made the voluntary after-tax contribution, CLICK HERE to proceed to Step 3.
STEP 3: Convert/move the Solo voluntary after-tax contribution to the Roth solo 401k or Roth IRA
Bank Account: If converting from the solo 401k bank account, CLICK HERE.
Brokerage Account: CLICK HERE if converting from the solo 401k brokerage account.
STEP 4: Fill Out On-Line Conversion Form to Report the Conversion to the IRS on Form 1099-R
While the conversion is not taxable, it is reportable to the IRS using Form 1099-R.
My Solo 401k Financial preforms this required reporting for its clients who timely request it.
To request the Form 1099-R, please CLICK HERE to complete the on-line conversion form.
One Participant: If there is just one participant in the solo 401k plan, you should have opened at minimum 2 (two brokerage accounts)—a Roth solo 401k brokerage account and a voluntary after-tax solo 401k brokerage account– for the solo 401k.
Two Participants: If both participants (e.g., both spouses) are participating in the solo 401k and plan to make voluntary after-tax contributions and then convert then to covert them to the Roth solo 401k, then at minimum 4 (four) brokerage accounts are required.
