back door Roth with co-mingled tIRA

[des999]

Does anyone know of a way to do do a back door Roth in my situation.  what options do I have?

I currently have a tIRA with 59k in it.  I stupidly put a $1000 of after tax contributions in it year ago.  I now have the option to roll that into my employer 401k plan, but I am told by Fidelity there is no way to undo the co-mingled tIRA.  What would happen if I did it anyway?  (I never filed anything when I did this, didn't know I was supposed to).

I'm guessing I could convert it to Roth and pay taxes, but that could get costly, I'd have to see if the math works.  any other thoughts?

appreciate it.  can't believe that $1000 could end up costing me quite a bit of headaches.  :)

[MDM]

I now have the option to roll that into my employer 401k plan, but I am told by Fidelity there is no way to undo the co-mingled tIRA.  What would happen if I did it anyway?

Did what - rolled all the pre-tax money into the 401k, leaving only the basis?  If that goes through, you are all set. 

(I never filed anything when I did this, didn't know I was supposed to).

Do you mean you did not file form 8606 last year?  If so, just do it now.  You can send in that form all by itself, and are unlikely to hear anything about it from the IRS.

[reeshau]

I now have the option to roll that into my employer 401k plan, but I am told by Fidelity there is no way to undo the co-mingled tIRA.  What would happen if I did it anyway?

Did what - rolled all the pre-tax money into the 401k, leaving only the basis?  If that goes through, you are all set. 

Can he really just leave the basis?  I would think this would still be hit by the pro rata rule.  To separate the two amounts, there would need to be a simultaneous rollover to separate traditional and Roth accounts, as the simultaneous action would be considered a single rollover.

https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans

des999, does your new employer have a Roth option in the 401k?  What is their response to this idea?

[des999]

I now have the option to roll that into my employer 401k plan, but I am told by Fidelity there is no way to undo the co-mingled tIRA.  What would happen if I did it anyway?

Did what - rolled all the pre-tax money into the 401k, leaving only the basis?  If that goes through, you are all set. 

Can he really just leave the basis?  I would think this would still be hit by the pro rata rule.  To separate the two amounts, there would need to be a simultaneous rollover to separate traditional and Roth accounts, as the simultaneous action would be considered a single rollover.

https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans

des999, does your new employer have a Roth option in the 401k?  What is their response to this idea?

yes I am maxing out my after tax contributions and having them auto put into Roth 401k.

I'll have to ask the co if I can just roll all the pre-tax dollars from IRA into my 401k and leave the after tax.  (I think that is what I can/should do).

[des999]

I now have the option to roll that into my employer 401k plan, but I am told by Fidelity there is no way to undo the co-mingled tIRA.  What would happen if I did it anyway?

Did what - rolled all the pre-tax money into the 401k, leaving only the basis?  If that goes through, you are all set. 

yes, rolled over all the pre-tax money into 401k.

(I never filed anything when I did this, didn't know I was supposed to).

Do you mean you did not file form 8606 last year?  If so, just do it now.  You can send in that form all by itself, and are unlikely to hear anything about it from the IRS.

yes, didn't do an 8606 for the year I put in the after tax money.  I guess I should do that this year.  I was just confused b/c Fidelity told me there was no way to un-mingle the different monies.  I think as long as my employer takes the IRA pre-tax rollover, and I do my 8606 for the after tax I'm golden.

Thanks for the replies!

[reeshau]

yes I am maxing out my after tax contributions and having them auto put into Roth 401k.

I'll have to ask the co if I can just roll all the pre-tax dollars from IRA into my 401k and leave the after tax.  (I think that is what I can/should do).

If you have a Roth option, I would ask them to roll pre-tax to the traditional side, and after-tax to the Roth side.  Then, you're done.  I would make sure your 8606 is in before you do it.

[MDM]

I now have the option to roll that into my employer 401k plan, but I am told by Fidelity there is no way to undo the co-mingled tIRA.  What would happen if I did it anyway?

Did what - rolled all the pre-tax money into the 401k, leaving only the basis?  If that goes through, you are all set. 

Can he really just leave the basis?

Yes, if the 401k plan accepts incoming rollovers from "non-rollover" IRAs. 

I would think this would still be hit by the pro rata rule.  To separate the two amounts, there would need to be a simultaneous rollover to separate traditional and Roth accounts, as the simultaneous action would be considered a single rollover.

https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans

That reference is for taking money out of 401k after-tax accounts.  Des999 is looking to roll money into a pre-tax 401k.

None of the brokerages know whether des999 deducted none, some, or all of those traditional IRA contributions in the non-rollover IRA.

[MDM]

yes I am maxing out my after tax contributions and having them auto put into Roth 401k.

I'll have to ask the co if I can just roll all the pre-tax dollars from IRA into my 401k and leave the after tax.  (I think that is what I can/should do).

If you have a Roth option, I would ask them to roll pre-tax to the traditional side, and after-tax to the Roth side.  Then, you're done.  I would make sure your 8606 is in before you do it.

No need to roll non-deducted IRA money into a 401k.  Just leave it in the IRA and move it to a Roth IRA via the backdoor after the pre-tax IRA balance is $0.

[MDM]

yes, didn't do an 8606 for the year I put in the after tax money.  I guess I should do that this year.  I was just confused b/c Fidelity told me there was no way to un-mingle the different monies.  I think as long as my employer takes the IRA pre-tax rollover, and I do my 8606 for the after tax I'm golden.

Thanks for the replies!

You need to file form 8606 for the year you put in the after tax money.  You will also need to file form 8606 for this year if you convert that money to a Roth IRA.

[des999]

yes I am maxing out my after tax contributions and having them auto put into Roth 401k.

I'll have to ask the co if I can just roll all the pre-tax dollars from IRA into my 401k and leave the after tax.  (I think that is what I can/should do).

If you have a Roth option, I would ask them to roll pre-tax to the traditional side, and after-tax to the Roth side.  Then, you're done.  I would make sure your 8606 is in before you do it.

No need to roll non-deducted IRA money into a 401k.  Just leave it in the IRA and move it to a Roth IRA via the backdoor after the pre-tax IRA balance is $0.

easy enough, thanks again!

[des999]

yes, didn't do an 8606 for the year I put in the after tax money.  I guess I should do that this year.  I was just confused b/c Fidelity told me there was no way to un-mingle the different monies.  I think as long as my employer takes the IRA pre-tax rollover, and I do my 8606 for the after tax I'm golden.

Thanks for the replies!

You need to file form 8606 for the year you put in the after tax money.  You will also need to file form 8606 for this year if you convert that money to a Roth IRA.

got it.  much appreciated.