topic 401k to Roth IRA in Retirement tax questions

401k to Roth IRA

PRGearup1 — Mon, 03 Feb 2025 20:15:11 GMT

form asks if I rolled over one retirement investment to another type IRA. I withdrew last year from my 401K and deposited in my Roth IRA. Is that a rollover or a conversion?

Re: 401k to Roth IRA

MaryK4 — Mon, 03 Feb 2025 20:25:43 GMT

It is a rollover because you are moving it from one retirement account to another. This is important because rollovers do not count or reduce your annual contribution limit. It is also a conversion because you are changing it from a 401k which is pretax funds to a Roth so you will have to pay the tax on the contribtuions.

Re: 401k to Roth IRA

dmertz — Tue, 04 Feb 2025 00:20:44 GMT

Under the tax code it is referred to as a "taxable rollover." In the tax code, the term "conversion" refers only to the movement of funds from a traditional IRA to a Roth IRA.

Still, due to the similarity in moving funds from a traditional retirement account to a Roth IRA, taxable rollovers are often referred to colloquially as conversions. However, you'll see it reported on Form 1040 lines 5a and 5b with the ROLLOVER notation, with the taxable amount from box 2a of the Form 1099-R being included on line 5b.