My Solo 401k Financial clients also have the option to convert their voluntary after-tax solo 401k funds held in a Non-Custodial Retirement Plan at E-TRADE to the Roth solo 401k Non-Custodial Retirement Plan also held at E-TRADE .
Once your E-TRADE Investment Only (Non-Custodial Retirement Plan) brokerage accounts have been established, which My Solo 401k Financial can help facilitate by completing the applicable E-TRADE brokerage account forms, you will be able to fund and complete the mega backdoor Roth solo 401k conversion (i.e., convert the voluntary after tax solo 401k funds to the Roth solo 401k).
After making your solo 401k voluntary after-tax contributions to the E-TRADE brokerage account (a.k.a. Non-Custodial Retirement Plan) that was setup to separately hold the voluntary after-tax solo 401k contributions, the next step is convert them to the Roth solo 401k brokerage account also held at E-TRADE.
Here is How to Electronically Process the In-Plan Conversion of Voluntary After Tax Solo 401k funds to the Roth Solo 401k:
- Log in to view your E-TRADE brokerage accounts for the self-directed solo 401k that you opened through My Solo 401k Financial.
- Complete the following information once you are able to view the E-TRADE brokerage accounts:
Our On-Line Conversion Form
After you have E-TRADE internally convert the solo 401k voluntary after-tax funds to the Roth solo 401k, the next step is to log the conversion our website using the following link: https://www.mysolo401k.net/after-tax-to-roth-solo-401k-in-plan-conversion-form/
We, (not E-TRADE) will then issue the Form 1099-R by February of 2024 to report the 2023 voluntary after-tax conversion.
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 2024 or in 2025 for 2024.
