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t401k to Roth IRA process
11-26-2018, 12:24 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,901
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t401k to Roth IRA process
Fido is telling me that moving funds from a traditional 401k to a Roth IRA can now be done in one direct step. Previously the regs required the funds move from the t401k to a tIRA first, and next from tIRA to Roth IRA. I can't find confirmation online. Is a t401k direct to Roth IRA now permitted, and taxed as a conversion to Roth?
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11-26-2018, 12:42 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Jan 2018
Location: Elyria, OH
Posts: 1,937
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A Google search of "pre tax 401k to roth ira" brings up several sites that confirm this is possible.
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11-26-2018, 01:10 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,901
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 Quote:
Originally Posted by gwraigty
A Google search of "pre tax 401k to roth ira" brings up several sites that confirm this is possible.
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Link? The ones I see use the tIRA intermediary step.
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11-26-2018, 02:23 PM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,363
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I have a vague recollection of a previous thread that said that it could be done it one step.. I remember it being a surprise to me.
__________________
If something cannot endure laughter.... it cannot endure.
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Slow and steady wins the race.
Retired Jan 2012 at age 56
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11-26-2018, 02:33 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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11-26-2018, 02:34 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,901
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This site suggests it depends on the custodian.
https://www.goodfinancialcents.com/c...les-from-401k/
Back when conversion recharacterization was allowed I suspect some custodians preferred forcing a tIRA intermediary step so their clients could undo the conversion to Roth. With the conversion undo now disallowed apparently more custodians are permitting t401k direct to Roth IRA.
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11-26-2018, 02:42 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Aug 2011
Posts: 3,602
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I am pretty sure that I have been doing this for years.
I think IRS Pub 590-B addresses this.
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11-26-2018, 03:43 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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It may very well depend on your 401k custodian.
When rolling over combined 401k/Roth 401k funds from DW's 401k I was initially required to pull proportionate amounts from the 401k and Roth 401k and transfer them into just one tIRA/Roth IRA. No other choice. I called Fidelity about how to handle that (Roth funds to a tIRA, or traditional funds to a Roth). They said "we'll do whatever you tell us to do", so it was my impression that I could fix it to place the correct funds into the tIRA and Roth IRA accounts. I chose to place all the funds into a Roth IRA, since that seemed straight forward as a Roth to Roth transfer and a 401k to Roth IRA conversion that I should be able to recharacterize if necessary. Placing Roth funds into a tIRA seemed too risky, despite Fidelity's assurances. So I was pretty much forced to do a 401k to Roth IRA conversion. That was a few years ago, and everything worked fine and didn't cause a problem with the IRS.
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11-26-2018, 04:05 PM
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#10
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,327
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Quote:
Originally Posted by gwraigty
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That IRS chart only covers Roth 401k to Roth IRA conversion.
__________________
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11-26-2018, 04:41 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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Quote:
Originally Posted by jazz4cash
That IRS chart only covers Roth 401k to Roth IRA conversion.
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It also covers traditional 401K to Roth IRA.
ROLLOVER CHART
Roll To:
.........................................Roth IRA
Roll From:
Qualified Plan(1).......................Yes
(pre-tax)
1)Qualified plans include, for example, ........., 401(k)
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11-26-2018, 05:08 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Jan 2018
Location: Elyria, OH
Posts: 1,937
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Quote:
Originally Posted by jazz4cash
That IRS chart only covers Roth 401k to Roth IRA conversion.
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Thanks to kaneohe for showing where the chart does show the relevant info. 
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11-27-2018, 01:16 PM
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#13
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,327
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__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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