Doc Wealth — Mega Backdoor Roth
None of them show up until tax season.
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This week on the blog, read online.
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4 things to check before a Mega Backdoor Roth.
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A 52 year old hospitalist with a side practice can have $27,000 of mega backdoor Roth room on top of his hospital 401(k). Whether he actually gets it comes down to details that never come if you only hear from your local CPA in April.
By then, most of the decisions are already made. Deferral elections, payroll setup, and whether the plan even allows after tax money all get settled during the year.
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Here's what we check first
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Does the plan document allow after tax contributions and in plan Roth rollovers?
If not, nothing else on this list matters yet.
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Are after tax dollars going in as their own source, not labeled as deferrals?
Your plan administrator sets how this runs through payroll, so it’s worth confirming.
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Is someone tracking basis?
The contributions shouldn't be taxed twice. Only the earnings should, and the records are what prove it.
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Will your plan assets top $250,000 at year end?
That's when a Form 5500-EZ comes due, and a mega backdoor Roth can get you there faster than you'd expect.
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None of these are hard to fix early. They just need someone looking at the plan, the payroll, and the return together, before the year ends.
The full post walks through the 2026 math, including why converting sooner usually means less tax on the earnings.
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Read the full blog
Book a Call
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Until next time,
The Doc Wealth Team
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P.S. Also have a hospital 401(k)? Hit reply and tell us whether anyone has ever checked if the two plans share a cap.
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Doc Wealth · Physician Founded · Year Round Tax Planning · docwealth.com
390 NE 191st St STE 36713, Miami, FL 33179
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This material is intended for educational and informational purposes only and does not constitute tax, legal, accounting, or financial advice. The content is general in nature and may not apply to your specific circumstances. Tax laws and financial regulations are subject to change and interpretation, and the application of these laws can vary based on individual situations. Before making any decisions, you should consult with a qualified tax advisor, legal counsel, or financial professional.
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