One of my family members need a little help so I was hoping you fine folks answer some questions!
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Situation - fully maxing out pre-tax TSP contributions from day job - want to get some additional savings outside of workplace from side-hustle/extra investments.
2017 - open and contribute 900 to SEP-IRA - deducted on 2017 taxes
2018 - rollover 900+/- earning in SEP-IRA to existing TSP (this is the only existing pre-tax IRA account)
- open and contribute 900 to solo-401k (new acct to avoid SEP to 401k conversion within 2 years 25% penalty)
- open and contribute 6500 (over 50) nondeductiable tIRA and immediately convert to Roth
Specific questions:
Are amounts in Solo-401K excluded from Pro-rata?
Does rolling over the 2017 SEP-IRA - entire account balance in 201 negate the pro-rata rule for Roth conversions? I believe so because Form 8606 line 6 asks for value of all traditional, SEP, and SIMPLE plans as of Dec 31.
Does this still give me a side-hustle 401k deduction with NO taxes due on the backdoor Roth?