Roll post-tax money into a Roth IRA?

[Guest gfowler]

I participated in a Thrift Savings Plan and contributed post-tax money. It was also matched by the employer. I am now terminated and would like to roll this money over to a Roth IRA. The administration firm of my previous employer states that I am not able to do this. What is the reasoning behind this? I was told that I can roll the money over to a traditional IRA, but not a Roth. Are there any other options, since I do not want to roll it over to a traditional IRA since it is post-tax money. Is this according to the plan document or is it a regulation for all such plans? Any information would be helpful. Thank you.

[Mary Kay Foss]

The plan must be rolled first to a traditional IRA and then to a Roth. A Roth cannot accept funds directly from a qualified plan.

[Guest gfowler]

Do I have to pay taxes on this money when it is converted to a Roth, after rolling it to a traditional IRA? That would be paying tax on this twice. Thanks.

[papogi]

You will only pay tax on that which represents amounts above your basis in the account. Your basis consists of the amounts you have already paid tax on. You will not have to pay the tax on those dollars twice. You will use IRS Form 8606 to report the conversion, and to compute that portion which is taxable. That end figure will be entered on Form 1040, line 15b.