Ho to Process a Charles Schwab Conversion of Voluntary After-Tax Solo 401k Funds to a Charles Schwab Roth IRA

My Solo 401k Financial clients can use Charles Schwab to hold their self-directed solo 401k funds including the voluntary after-tax solo 401k funds. They may then also convert the voluntary after-tax solo 401k funds to their  Charles Schwab Roth IRA.  This is all possible because My Solo 401k Financial not Charles Schwab offers a solo 401k plan that allows for voluntary after-tax contributions in addition to the conversion of voluntary after-tax solo 401k funds to Roth IRAs. 

Video Slides: 

Mega Backdoor Roth Solo 401k Conversion to a Schwab Roth IRA

COMPLIANCE NOTE:

Conversions are reported in the year that the funds are actually moved over to the Roth account. 

The solo 401k contribution rules are different from the  conversion rules. Contributions can be made by your business tax return due date plus any timely filed extension for the prior year.

In sum, the voluntary after-tax solo 401k conversion will be nontaxable regardless if  you convert the after-tax contributions that were made in 2021 or in 2022 for 2021.

SOLO 401(K)

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