The House Ways and Means Committee recently released more legislative language as part of its $3.5 trillion budget reconciliation bill. The bill contains retirement account proposals specifically targeting the backdoor Roth IRA and the mega backdoor Roth 401k including solo 401k. Apparently, the purpose of targeting retirement account is to help to pay for the for the fiscal year 2022 budget bill.
Following are the items referenced in the proposed bill that apply specifically to IRA and 401k conversions:
- Closes the “back-door” Roth strategy by eliminating conversions of all after-tax IRA and after-tax employer plan contributions (e.g., solo 401k plans).
- Eliminates pretax conversions and rollovers to Roth from non-Roth accounts for those making $400–$450k (beginning in 2032)
For other items found in the proposed bill, CLICK HERE.