The Biden Administration’s Fiscal Year 2025 Budget Proposal has once again resurrected a potential ban on the “Mega Backdoor Roth” strategy. Let’s dive into the history of this proposal and what it could mean for your retirement planning. Video Slides: Proposed Ban Background and History The Mega Backdoor Roth strategy first came under scrutiny by […]
Mega Backdoor Roth IRA and 401k Bans NOT included in Inflation Reduction Act!
Nov. 3rd, 2021: While the proposal to ban accredited investments in IRAs is still not in the latest pending bill, the Proposed Band of the Backdoor Roth & Mega Backdoor Roth is Back–See the following for more Information: https://www.mysolo401k.net/back-again-backdoor-roth-and-mega-backdoor-roth-added-back-to-pending-reconciliation-bill-build-back-better-act-of-2021/ Great news! The government has dropped from the pending Build Back Better Act the proposal to ban accredited […]
UPDATE: Great News! The mega backdoor will not be banned for 2022 (LEARN MORE HERE) as President Biden announced on December 16 that the Build Back Better bill won’t get passed in 2021so you just need to adopt the solo 401k plan by December 31, 2021 so that you can make all solo 401k contribution types including the voluntary […]
QUESTIONS: My wife’s W2 job now allows after-tax 401k contributions & in-service withdrawals. Once she receives a distribution check, what are the steps to make the rollover to the Roth solo 401k? She already has a Roth solo 401k brokerage account under the self-directed solo 401k established with Schwab (but no voluntary after-tax account). Are […]
How to make Solo 401k contributions by the extended tax return deadline
Both Roth solo 401k contributions and voluntary after-tax solo 401k contributions fall under the employee (salary deferral) contribution umbrella. In other words, both of these contribution types are not considered employer (profit sharing) contributions, so the contributions are not tax deductible because they are considered made with post-tax dollars. Not all solo 401k plan document […]
If your self-employed business is an S-Corp or C-Corp that sponsors a solo 401k plan, and you elect to make after-tax contributions to the solo 401k plan, you may report these contribution on Form W-2 line 14. See below. IMPORTANT NOTE: Don’t confuse after-tax solo 401k contributions with Roth solo 401k contributions as they are […]
