While not all Solo 401k providers are required to participate in the process of assisting clients process In-Plan Roth Conversions, and instead refer them back to their CPA or tax professional, MySolo401k.net guides their clients through the entire In-Plan Roth Conversion process.
To process an In-Plan Roth Conversion of a Self-Directed Solo 401k, we complete an "In-Plan Roth Conversion Election Form" and e-mail or fax it to the Solo 401k trustee for his or her signature. After Solo 401k trustee signs and returns the completed election form, we prepare Form 1099-R to report the amount converted. An "Explanation of In-Plan Roth Conversions" is also provided to the client for informational purpose and records.
How is an in-plan Roth conversion reported by MySolo401k.net to the IRS?
The In-Plan Roth conversion of the Self-Directed Solo 401k is taxable in the year of the conversion. For example, if the In-Plan Roth Conversion is processed in 2012, the total amount converted is includible in gross income for tax year 2012. MySolo401k.net will report the total in-plan Roth conversion on Form 1099-R for 2012, the year in which the conversion occurred. MySolo401k.net mails copy to the Solo 401k plan trustee by end of January of 2013 and a copy to the IRS. The Solo 401k trustee files Form 1099-R with his or her tax return by tax return due date.
How does the Solo 401k Trustee/Participant Report the in-plan Roth conversion on their personal tax return?
The In-Plan Roth conversion of the Self-Directed Solo 401k is taxable in the year of the conversion. For example, if the In-Plan Roth Conversion is processed in 2012, the total amount converted is includible in gross income for tax year 2012. MySolo401k.net will report the total in-plan Roth conversion on Form 1099-R for 2012, the year in which the conversion occurred. MySolo401k.net mails copy to the Solo 401k plan trustee by end of January of 2013 and a copy to the IRS. The Solo 401k trustee files Form 1099-R with his or her tax return by tax return due date.
How does the Solo 401k Trustee/Participant Report the in-plan Roth conversion on their personal tax return?
If tax payer files Form
1040, report Roth Solo 401k conversion amount on line 16a and 16b.
If tax payer files Form
1040A, report Roth Solo 401k conversion amount on line 12a and 12b.
If tax payer files Form
1040RN, report Roth Solo 401k conversion amount on line 17a and 17b.
Additional Information Regarding the
In-Plan Roth Conversion Regulations:
Retirement Plans FAQs on Designated Roth Accounts:
No comments:
Post a Comment