dmertz
Level 15

Retirement tax questions

If you roll over the 401(k) to a traditional IRA in 2025, the Roth IRA conversion that you already did earlier in 2025 will become mostly taxable because the pro rata calculation must be done using your year-end balance in traditional IRAs (which will include the funds rolled over from the 401(k)).  The relative timing of these transactions in 2025 is irrelevant.  To avoid the 2025 conversion becoming largely taxable, you'll need to wait until 2026 to do a rollover of the 401(k) to a traditional IRA.

 

Moving the 401(k) to a traditional IRA is a reportable rollover that must be reflected on Form 1040 lines 5a and 5b.  Such a rollover is nontaxable, so it would not be included on line 5b.