I'm looking for some guidance from people who have done a mega backdoor Roth IRA in Massachusetts. Does it follow federal rules on taxation?
I am trying to understand the Schedule X, Line 2 worksheet. Is the conversion from after-tax 401k to Roth IRA a part of "Total IRA/Keogh plan distributions, qualified charitable IRA distributions, Roth IRA conversion distributions received"? Or is the conversion only reported on this worksheet when the money is distributed from the Roth IRA? How are earnings inside the after-tax 401k reported?
https://www.freetaxusa.com/taxes2020/fo ... a_wkst.pdf
Mega Backdoor Roth IRA in Massachusetts
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Re: Mega Backdoor Roth IRA in Massachusetts
I don't live in Massachusetts, but reading your description I note the following:
I would re-read the instructions using this definition of "distribution" and see if that makes it more clear.
A rollover from an after-tax 401K to a Roth IRA by definition is not a distribution. Distributions are money leaving a retirement account, the exception being a Roth Conversion where the money leaves one class of account (pre-tax) and is put into a different class of account (after-tax)."Total IRA/Keogh plan distributions, qualified charitable IRA distributions, Roth IRA conversion distributions received"
I would re-read the instructions using this definition of "distribution" and see if that makes it more clear.
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