Backdoor Roth IRA vs mega backdoor Roth 401k

[archanapb]

Hi, I did a traditional IRA to Roth IRA backdoor Roth IRA conversion for $6500 in 2023. In 2024, I'm doing a mega backdoor ROTH conversion of my after-tax income to my 401k. Currently, I have two accounts. One is the Roth IRA account that I opened in 2023 with $6500 and Roth rollover/Roth in-plan conversion as a source in my 401k. Do I need to pay taxes for either one? Should I just maintain one Roth IRA account for all these funds? Can I move the funds from my 401k Roth source to the individual Roth IRA account or vice versa? Do I need to pay taxes for both accounts now? What's my best course of action to pay the least amount of taxes?

[AmyC]

You want to do the conversion when your income is lower and the tax brackets are lower. If your income will be going down, wait. For most people, income continues to go up and the tax brackets may well change to higher amounts so this might be a good time. However, depending on the amount of money being dumped into your income for taxes, you may want to spread it over a few year so that you don't push yourself into a much higher tax bracket. Check the income brackets, use tax calculators, determine the sweet spot and use that amount. See Tax calculators & tools.

[archanapb]

This doesn't answer my question. First, I want to know if the Roth IRA account that I opened vs the source  Roth account that was added in my 401K for my after tax contributions are one and the same? If they are not the same, can I make transfers to and from either account and does it make sense to have a single account?

[RobertB4444]

Roth accounts aren't taxed.  That's their whole point.  You already paid the taxes on the money you put in and - as long as you wait til you meet the requirements i.e. become retired - any earnings inside the account are not taxed when you take it out.

If you have two Roth accounts they are not the same.  Any more than two checking accounts at two different banks are the same.  You can transfer amounts between two Roths without paying taxes but it does generate a form that you have to enter into your tax return every time that you do it.  So be aware.

Whether you should consolidate your accounts is entirely up to you.  There are no tax benefits to doing so.  But if you prefer one management company over another then go ahead.  Again, it's not taxable to do so but it will generate a form that requires you to report it.  

@archanapb