A Roth IRA conversion takes pre-tax funds from an employer retirement plan and moves them into a Roth IRA.
The funds moved into the Roth IRA are added to your tax return as taxable income in the year of the conversion. Assuming relevant legal requirements are met, Roth conversions are generally not subject to the 10% early withdrawal penalty, only income tax. Usually, after conversion, at least 5 years must pass from the conversion date before you can withdraw the funds without penalty.
If you're considering a Roth IRA conversion, consult your accountant, financial advisor, or other tax professional about the tax implications for your situation.
What you’ll need:
- An Unchained IRA
- Creating a vault is not required. You can upload keys and build a vault at your convenience.
- The information for your employer plan, particularly the sign-in information for the online account management portal with your plan administrator.
How to complete an in-plan Roth conversion:
- Begin the Employer Plan Rollover steps and submit your information to Capitalize.
- Capitalize will work on your behalf with your plan administrator to perform the conversion. Many plan administrators can perform the conversion easily before sending the funds to Fortis.
- Once the funds arrive in your account, you can purchase bitcoin.
If your current plan administrator cannot complete an in-plan Roth conversion:
- To receive pre-tax funds, you must have an Unchained Traditional IRA. If you do not already have one, the workflow with Capitalize will direct you to apply for a new traditional IRA account.
- Submit a brand new funding request for a Traditional-to-Traditional Employer Plan Rollover. This time, Capitalize will direct your plan administrator to send the funds without any conversion. The conversion will take place on the Fortis Bank and Unchained side.
- Once the funds are credited to your Traditional IRA cash balance, follow our next guide on how to complete a USD Roth conversion.
Note: No contents of this article may be relied upon as tax, legal, or financial advice, as they have not been tailored to you and have not been reviewed by any attorney, financial advisor, or tax professional. For any questions related to your own specific situation, please consult with your own attorney, tax professional, and/or licensed financial advisor.