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Level 2
posted Feb 7, 2024 2:41:19 PM

Mega backdoor Roth IRA

What are the key things to keep in mind when I use the mega backdoor roth IRA strategies? How can I calculate if it'll help my tax situation or not?

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1 Replies
Employee Tax Expert
Feb 7, 2024 3:29:22 PM

That you want to be sure that you're using post-tax funds and the transfer is handled between your 401K and your Roth without you ever touching the money.

 

The earnings when distributed from your post-tax 401K are taxable.  The earnings when distributed from a Roth are not.  It's a good idea for everyone's tax situation - eventually.

 

@shsandeep