🔓 Reverse Rollover: Unlock the Backdoor Roth IRA

[George Blower]

Question: I’m a solopreneur with a SEP IRA, and the pro-rata rule is blocking my clean Backdoor Roth IRA conversion. How does a reverse rollover to a Solo 401k actually unlock the Backdoor Roth IRA?

Answer: My Solo 401k Financial explains that the pro-rata rule only looks at dollars sitting inside IRA accounts — traditional, SEP, SIMPLE, and rollover. Dollars held inside a Solo 401k are invisible to that calculation. A reverse rollover moves the pre-tax SEP IRA balance out of the IRA ecosystem and into a Solo 401k, leaving the traditional IRA balance at zero across all of the solopreneur’s IRAs. Once that’s done, the next non-deductible traditional IRA contribution can be converted to a Roth IRA at a 100% tax-free result — the Backdoor Roth IRA finally works the way it was intended.

The process is straightforward with My Solo 401k Financial: confirm Solo 401k eligibility (earned self-employment income, no non-owner non-spouse full-time W-2 employees), adopt a Solo 401k plan that accepts incoming SEP IRA rollovers, open the holding account at the bank or brokerage of choice, transfer the SEP IRA dollars into the Solo 401k, and then execute a clean Backdoor Roth IRA conversion. My Solo 401k Financial has helped clients move funds from hundreds of financial institutions and tracks each one’s process to keep the reverse rollover as smooth as possible.

Learn More:

https://www.mysolo401k.net/the-pro-rata-trap-why-solopreneurs-with-a-sep-ira-need-a-solo-401k/

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The Pro-Rata Trap: Why Solopreneurs With a SEP IRA Need a Solo 401k - My Solo 401k Financial

My Solo 401k Financial offers self-directed Solo 401k, IRA LLC & ROBS 401K Retirement Plans. Learn about The Pro-Rata Trap: Why Solopreneurs With a SEP IRA Need a Solo 401k

George Blower

My Solo 401k Financial

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