NOTE: Moving this topic to the tax board. It's probably better suited there. Apologies for the double post! https://forum.mrmoneymustache.com/taxes/mega-backdoor-roth-via-solo-401k-after-gaining-employees-legitimate-91110/ I'm wishing to perform a mega backdoor roth this coming tax year and am unsure whether I am allowed to do so.
Let me make an attempt at a concise context:
- I own my own business
- I have a Traditional Solo 401k that I opened a couple of years ago before I had employees
- I began hiring full time employees at the start of this year. I stopped contributing to the s401K as a result since I no longer meet the IRS "testing" requirements.
- The balance of the s401k was rolled into a Traditional IRA last year
- The s401K remains open with zero balance with TD Ameritrade.
- TD Ameritrade notes that they are unable to "code" a contribution as an after-tax contribution, however I can still make the contribution as long as a tax consultant or myself accounts for it in my taxes.
Are after-tax contributions allowed to a s401K once the IRS "test" no longer passes, or are they viewed much the same as a usual employer or employee contribution? Is there anything else here that will pose a problem?
Thanks gang!
Thoughts?