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Switching from 100% Mega Backdoor Roth to Traditional + After-Tax/Roth
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3 Replies
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Hi,
I wanted to confirm the proper contribution and documentation process when switching from making 100% Roth contributions to using a combination of Traditional and Roth within a Solo 401(k).
In prior years, I contributed my entire annual Solo 401(k) limit as voluntary after-tax contributions and then converted the full amount to my Roth Solo 401(k) through an in-plan Roth conversion. I did not make any Traditional/pre-tax employee elective deferrals.
Because of this, the only form I generally needed to submit to MySolo401k was the After-Tax to Roth Solo 401(k) In-Plan Conversion Form.
For 2026, I’m considering changing my contribution structure to:
– $24,500 pre-tax employee elective deferral through payroll
– $47,500 voluntary after-tax employee contribution, followed by an in-plan conversion to my Roth Solo 401(k)
– $0 employer contribution/profit sharing
– $72,000 total contributions
My anticipated W-2 compensation for the year will be approximately $80,000–$90,000.
I have two questions:
Is this contribution structure permitted, or is there any requirement to make an employer contribution/profit-sharing contribution in order to reach the full $72,000 annual limit?
Since this would be my first year making a Traditional/pre-tax employee elective deferral, is there an additional MySolo401k form or election I need to complete for the $24,500 Traditional contribution? Or do I simply have the $24,500 withheld as an elective deferral through payroll and continue submitting only the After-Tax to Roth Solo 401(k) In-Plan Conversion Form for the $47,500 voluntary after-tax portion?
I wanted to confirm the proper procedure before changing my payroll setup, and figured I’d post this publicly in case the answer is helpful to anyone else transitioning from a 100% Mega Backdoor Roth strategy to a mix of Traditional and Roth contributions.
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QUESTION:
Is this contribution structure permitted, or is there any requirement to make an employer contribution/profit-sharing contribution in order to reach the full $72,000 annual limit?
RESPONSE:
Yes. Assuming the Solo 401k owner has not made any employee elective deferrals to another 401k, 403b, or similar employer plan for 2026, and based on the stated W-2 compensation of approximately $80,000 to $90,000, the following 2026 contribution structure is permitted:
$24,500 pre-tax employee elective deferral
$47,500 voluntary after-tax contribution
$0 employer contribution
$72,000 total contributions
There is no requirement to make an employer contribution. A Solo 401k owner can choose to make employee contributions, employer contributions, voluntary after-tax contributions, or a combination.
The $24,500 employee elective deferral limit is a person-level limit. Therefore, employee elective deferrals made to another 401k, 403b, or similar employer plan for 2026 would reduce the amount that can be made as an employee elective deferral to the Solo 401k.
The $72,000 annual additions limit includes regular employee elective deferrals, employer contributions, and voluntary after-tax contributions.
QUESTION:
Since this would be my first year making a Traditional/pre-tax employee elective deferral, is there an additional MySolo401k form or election I need to complete for the $24,500 Traditional contribution? Or do I simply have the $24,500 withheld as an elective deferral through payroll and continue submitting only the After-Tax to Roth Solo 401k In-Plan Conversion Form for the $47,500 voluntary after-tax portion?
RESPONSE:
There is no additional contribution form that needs to be submitted to us for the $24,500 pre-tax employee elective deferral.
Assuming no employee elective deferrals have been made to another 401k, 403b, or similar employer plan for 2026, the Solo 401k owner can make the $24,500 employee elective deferral and deposit it into the pre-tax Solo 401k account. The pre-tax employee elective deferral is reported on the W-2. There is no Solo 401k requirement that the contribution itself be funded through payroll.
The Solo 401k Annual Contribution Form is optional and does not need to be returned to us.
For the $47,500 voluntary after-tax contribution, the funds are first deposited into the voluntary after-tax Solo 401k account and then converted to the Roth Solo 401k account.
The Solo 401k owner continues to submit the After-Tax to Roth Solo 401k In-Plan Conversion Form so that we have the information needed for the Form 1099-R reporting of the conversion:
https://www.mysolo401k.net/mega-backdoor-roth-solo-401k-in-plan-roth-401k-conversion/
Therefore, assuming no employee elective deferrals have been made to another plan for 2026, the proposed process is $24,500 to the pre-tax Solo 401k account plus $47,500 to the voluntary after-tax Solo 401k account followed by the in-plan Roth conversion, with no employer contribution required.
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Thanks George, that makes sense. I just have one final question regarding the timing of actually funding the contributions.
Since my remaining 2026 payrolls have not yet been processed, is it permissible for me to go ahead and deposit the full $24,500 into the pre-tax Solo 401(k) account now, and separately deposit the full $47,500 into the voluntary after-tax account now and complete the Roth conversion, provided that my Gusto payroll/W-2 reporting by year-end ultimately reflects the full $24,500 pre-tax employee elective deferral?
Or does the $24,500 pre-tax contribution need to follow the payroll timing more closely—for example, depositing $12,250 after the September payroll and another $12,250 after the December payroll?
Alternatively, would it be permissible to process both remaining payrolls with the proper pre-tax deferrals and then make a single $24,500 deposit into the pre-tax Solo 401(k) account at the end of the year?
I mainly want to understand whether the contribution can be funded in advance of the payroll deductions, or whether it should only be deposited after the corresponding W-2 compensation has actually been processed.
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The Solo 401k contribution deposits do not need to correspond to the timing of the payroll deductions. The key is that the contributions are deposited into the applicable separate Solo 401k accounts, are within the applicable contribution and compensation limits (and the contributions are supported by sufficient w-2 wages from the self-employed business), and the $24,500 pre-tax employee elective deferral is properly reported on the 2026 W-2 (note: this is also assume that no employee contributions were made to another plan such as a day job 401k).
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