Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I don't know all the answers, but I'll give you the ones I do know.

<I have considered doing a 401K roll-over into a self-directed IRA (on a annual basis?, is this allowed?) and wondered if I could roll into a Roth
IRA or are these reserved for AFTER-tax contributions?>

I don't know. It sounds like you're asking if you can take each year's current 401k contribution and put it into an IRA. I don't think you can move a 401k if you're still employed by the company.

It can be moved to an IRA after you leave the company. If it goes into a Roth, you would have to pay taxes the same as if you rolled a regular IRA into a Roth. I don't know if it can go directly to the Roth or if it has to bounce through a regular IRA first. Either way, the result would be the same, only the amount of paperwork would change.


<I figured that I would set up a Roth IRA for 1998 and was wondering about 1997 IRA funding
(since I haven't yet). If I wanted to establish a Roth IRA and fund it for 1997 and 1998 tax years,
am I correct in my assumption that I would have to put 1997 funding in a standard IRA, take a
distribution and pay penalties and taxes and then put the remainder in a Roth IRA with the 1998
funding?

(Remember that you only have until April 15th to fund the 1997 IRA.) Once you set up the 1997 IRA, decide if you want to make the contribution deductible or nondeductible.

If the IRA is deductible, then the rollover will require paying taxes on it, but that payment will be spread over four years. The four year spread ONLY applies to rollovers to a Roth made in 1998.

If you decide not to deduct the 1997 IRA contribution, then taxes would only be due on the gain from the time the IRA was set up until the rollover. The contribution itself would not be taxed since you payed taxes on it already by choosing not to use it as a deduction. If choosing this option, remember to file form 8606 (Nondeductible IRA) to specify that the contribution was not deductible.

In either case, there is no penalty if this is a direct rollover. Which option you choose depends upon when you want to pay the taxes on the contribution (all in 1997 or spread over the next four years).

<Second, I might be re-filing prior year taxes for other reasons and wondered if I could re-state my
IRA contribution from $0.00 to $2000/year funding it now eventhough I didn't ACTUALLY fund it then?(I presume the answer to be NO!)>

You presume correctly. You can only fund an IRA until April 15th of the following year. The window for prior years has been long closed. For the next 25 days, you can fund a 1997 IRA. Then that window is also closed for good.
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement