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SAR SEP to Roth IRA


Guest jerryl3
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Guest jerryl3

I have an IRA/SAR SEP which I have had for 6 years. Is it possible to move some of the account funds into a Roth IRA? Can I change my weekly payroll deductions to go directly to a Roth?

Thanks Jerry L

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In general, the SEP IRA assets may be converted into a Roth IRA. Ongoing employer contributions can not go directly into a Roth. SARSEP amounts for the current year can not be distributed until the employer has made a determination that the 125% rule has not been violated, or March 15, whichever comes first. Some would argue that the 125% test only affects HCE, but the model notice restricts all employees from distributing those contributions, the instructions, however, seem to restrict distributions from being made to HCEs only (go figure).

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