They would deduct Social Security and Medicare from the 401(k) contribution.Put the money in the 401k, then roll the total (prior + new) into a regular IRA, then convert to Roth. There's no difference in the federal taxation of both, but you simplify the transactions by combining, and I think (guess) that you might avoid the SS/Med/whatever tax on the 401k contribution.
If there's no difference in taxation, I would lean towards not putting it into the 401(k) because the custodian issues paper checks for rollover, and the process requires a long period of time out of the market, plus there's a non-zero chance that USPS will lose the check.
Statistics: Posted by popoki — Mon Jan 06, 2025 12:03 pm
