Can I rollover my rollover IRA to 401k + do a Roth IRA Backdoor Conversion for myself and my wife all this year?

[macuser_22]

You and your wife?

IRA accounts are Individual.    What you do with your 401(k) or IRA has nothing to do with your spouse.

For a backdoor Roth to work, your IRA (that is the aggravate value of all Traditional, SEP and SIMPLE IRA accounts) must have a starting value of zero and year end value of zero.

If you have a current Traditional IRA the  it is possible to roll that into a 401(k) (provided that the plan permits that) in order to make the IRA value zero.    Then make a non-deductible contribution to the Traditional IRA and immediately have that converted to a Roth IRA before it can have any earnings or *losses so that the IRA value again is zero at year end.  Keep good records to show the dates and 401(k) plan deposits should the IRS questions  it.  The 401(k) plan does not report rollovers to the IRS so it is up to you to have the records to prove the dates of the transactions and IRA value.

*A loss for the year would complicate the 401(k) rollover in the same year.  It is best to avoid any gain or loss by converting ASAP after the contribution.

[mikjon]

Thanks for the response, allow me to clarify. Both my wife and I each have a Roth IRA. Our MAGI this year will exceed the 203,000 threshold to allow direction contributions to our Roth IRAs. Before we realized this we had each contributed a few hundred dollars into our separate accounts earlier in the year. I am in the process now of requesting a refund of excess contribution for both our accounts. So for my understanding do I have the below correct? And it all must be done before December 31 of this year correct?

1) Request Excess Refunds for both our Roth IRA accounts

2) Rollover her "Rollover IRA" to her 401K; do I close this account specifically at that point or is it auto closed?

3) Open a new Traditional IRA for each of us, fund it with 6,000 each and immediately do the Roth IRA Conversion a day or two later? I presume I would convert this into our existing Roth IRA accounts?

[macuser_22]

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@mikjon wrote:

 And it all must be done before December 31 of this year correct?

1) Request Excess Refunds for both our Roth IRA accounts

2) Rollover her "Rollover IRA" to her 401K; do I close this account specifically at that point or is it auto closed?

3) Open a new Traditional IRA for each of us, fund it with 6,000 each and immediately do the Roth IRA Conversion a day or two later? I presume I would convert this into our existing Roth IRA accounts?

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That is correct if your spouse is the one with the existing Traditional IRA.  It must b e done this year if you want it to be a 2019 contribution. 

If you open the Traditional IRA with the same financial institution that holds the existing Roth IRA's then most know abut backdoor Roth's and can usually do the contribution and conversion at the same time - there is no need to wait a "day or two".

[TaxFiller4]

Hi Macuser_22

I have question on below for MEGA Backdoor ROTH.

"For a backdoor Roth to work, your IRA (that is the aggravate value of all Traditional, SEP and SIMPLE IRA accounts) must have a starting value of zero and year end value of zero."

1. Does it mean in says 2020 I transfer all SEP, Traditional IRA to Solo 401K, then in 2021 "starting value of zero and year end value of zero." this will be true or. in 2020 itself I can do above.

I have question for MEGA BACKDOOR ROTH IRA. Would you be able to answer, how does it work.
I am Self employed and from prior year I have SEP-IRA, Traditional IRA, Roth IRA, Solo-401K account.

Here is what I am trying to do. I want to contribute to MEGA BACKDOOR ROTH IRA. I am contribute max to tax-deferred Solo 401K. To contribute remaining amount (say 20K) upto 56K limit, what is right way to do it.
1. Transfer existing SEP-IRA, Traditional IRA to Solo 401K
2. Contribute to Solo 401K (tax deferred limit)
3A. Contribute 20K to Solo 401K Roth
or
3B. Contribute 20K to Solo 401K and convert 20K to Individual Roth IRA.

Thanks