I know about the bankruptcy related potential downsides of these plans. I have a few further questions on usage of these in ways that start to rise to the level of "oh my god, there's no way this is allowed"
1) can you use a 409(a) plan to reduce your AGI and qualify for federal student loan forgiveness?
2) can you use a 409(a) plan to reduce your AGI and qualify for affordable housing subsidies (not section-8, but rather state ones)? This one seems very obviously wrong, but I don't know why (legally), and am curious.
3) when you're getting payouts from the 409(a) plan do you get multiple W-2s? When this happens can you contribute this income to the companies' qualified (401(k)) plan? Can you do a mega-backdoor Roth conversion with these funds, in addition to doing a mega-backdoor Roth with funds from your current employer? I know the mega-backdoor Roth is per-unrelated employer but it seems like you could end up doing 3-5 full mega-backdoor contributions at a time, potentially bypassing a huge amount of capital gains taxes (even though you'd probably be at the 37% marginal rate). Would you get screwed by AMT? Would you end up spending more money defending yourself when you eventually get audited?
All of these seem like "asking to be audited", but that's what I thought when I learned of the mega-backdoor Roth procedure.
1) can you use a 409(a) plan to reduce your AGI and qualify for federal student loan forgiveness?
2) can you use a 409(a) plan to reduce your AGI and qualify for affordable housing subsidies (not section-8, but rather state ones)? This one seems very obviously wrong, but I don't know why (legally), and am curious.
3) when you're getting payouts from the 409(a) plan do you get multiple W-2s? When this happens can you contribute this income to the companies' qualified (401(k)) plan? Can you do a mega-backdoor Roth conversion with these funds, in addition to doing a mega-backdoor Roth with funds from your current employer? I know the mega-backdoor Roth is per-unrelated employer but it seems like you could end up doing 3-5 full mega-backdoor contributions at a time, potentially bypassing a huge amount of capital gains taxes (even though you'd probably be at the 37% marginal rate). Would you get screwed by AMT? Would you end up spending more money defending yourself when you eventually get audited?
All of these seem like "asking to be audited", but that's what I thought when I learned of the mega-backdoor Roth procedure.
Statistics: Posted by barcharcraz — Wed Jul 17, 2024 5:05 pm — Replies 0 — Views 96