Feb 27

I know that starting next yr, it will be possible to roll those 401K accounts eligible for rollover into an IRA to be rolled directly into a Roth IRA. If 100K is rolled over from a 401K to a ROTH IRA in 2008, will all 100K be taxed in 2008.

2 comments so far...

  • Doing the Right Thing Said on February 27th, 2010 at 5:46 pm:

    I believe everything will be taxed such as contributions, dividends, interest, and capital gains. Well, your contributions came out of your income before taxes were applied and your investments grew tax-deferred. You are going to be taxed anyway when you start withdrawing them when you retire.

    But now that you are going to roll it over into a Roth IRA, you pay the taxes now so that you can enjoy the tax-free withdrawals after age 59 1/2.

    I don’t know. That’s just my thinking. Maybe you should ask this question in the tax section.

  • Doc Said on February 27th, 2010 at 6:30 pm:

    Yes, the complete amount you roll over will be taxable in that year.

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