Mega Backdoor Roth IRA and 401k Bans NOT included in Inflation Reduction Act!

This past Sunday, the Senate voted to pass the landmark Inflation Reduction Act which is a scaled-down version of the Build Back Better (BBB) legislation that failed to pass last year.

Recall that the last year’s BBB legislation included bans on the Mega Backdoor Roth Solo 401k and Backdoor Roth IRA as means to raise revenue to offset the cost of the proposed spending in the Act.

Rather than include the Mega Backdoor Roth bans, the version of the legislation passed by the Senate will raise taxes on corporations including a 15% minimum tax on corporations with an income of at least $1 billion as well as a 1% excise tax on stock buybacks of publicly traded corporations.

Does this mean that I can still make Mega Backdoor Roth contributions to my Solo 401k?

While we will continue to diligently monitor legislative proposals that might impact the ability to make Mega Backdoor Roth Solo 401k contributions, the decision to not include the previously proposed bans in the legislation significantly reduces the likelihood of a ban for now and self-employed individuals with Solo 401k plans that support Mega Backdoor Roth Solo 401k contributions can proceed as normal.

For more information, please see The Mega Back Door Roth Using a Solo 401k Plan – My Solo 401k Financial

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About George Blower

I have the privilege of educating our clients about our products and services so that they can make informed and confident decisions about their financial future. Prior to joining My Solo 401k Financial, I served as the general counsel for a subsidiary of a Fortune 500 financial services company. Learn more about George Blower and My Solo 401k Financial >>


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