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Solo 401K

Forum|Forum|4 years ago
October 27, 2021
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My wife has a Solo 401K that is no longer funded as she retired. Are there any tax issues rolling it from Solo 401K to SEP IRA? Changing fund houses that manage but done want to trigger any penalties.

Best answer by macuser_22

A SEP IRA is a Simplified Employee Pension (SEP). If she is retired she would not have a SEP IRA. She can roll the 401(k) into a Traditional IRA at a financial institution of your choice. There is no tax on a rollover. She should have the trustee of the 401(k) preform a direct trustee-to-trustee rollover. If she takes the money herself and rolls it over (indirect rollover) then it must be completed within 60 days of the distribution or it will be disallowed and will be taxable.

macuser_22Answer

A SEP IRA is a Simplified Employee Pension (SEP). If she is retired she would not have a SEP IRA. She can roll the 401(k) into a Traditional IRA at a financial institution of your choice. There is no tax on a rollover. She should have the trustee of the 401(k) preform a direct trustee-to-trustee rollover. If she takes the money herself and rolls it over (indirect rollover) then it must be completed within 60 days of the distribution or it will be disallowed and will be taxable.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**