Consider Partial In-Plan Roth Rollover (Roth Solo 401k Conversion)

Partial In-Plan Roth Solo 401k Rollover | Roth Solo 401k Conversion | Process Partial Solo 401k Roth Conversion

For those looking to process an In-Plan Roth Rollover commonly referred to as Roth Solo 401k conversion, but are hesitant to do so because of the tax consequences, you may want to consider processing a partial in-plan Roth rollover (Roth Solo 401k conversion) to minimize the tax hit. By way of background, amounts converted from a traditional Solo 401k (pre-tax funds) to a Roth Solo 401k (post-tax funds) are fully taxable in the year of the conversion. However, the IRS Solo401k rules permit the self-employed business owner to process partial in-plan Roth rollovers. Therefore, since amounts processed in-plan Roth rollovers will increase your taxable income for the year, the potential exists for an in-plan Roth rollover to bump you into a higher income-tax bracket.  Lastly, there are no restrictions on the number of in-plan Roth rollovers that the Self-Directed Solo 401k participant may process.

Additional Information

How to Tax Report In-Plan Roth Rollovers visit:

 http://www.mysolo401k.net/Blog-for-MySolo401k.html?entry=in-plan-roth-rollovers-aka

Convert a Solo 401k Plan to a Roth Solo 401k Plan visit:

http://www.mysolo401k.net/Blog-for-MySolo401k.html?entry=can-i-convert-a-solo

For Roth Solo 401k Contributions visit:

http://www.mysolo401k.net/Roth_Solo_401k_Contributions.html