It sounds so great on paper because you read an article. An advisor clued me into an about a Mega Backdoor Roth IRA, utilizing a 401(k) plan and a little-used provision called the Voluntary Contribution provision that could potentially allow highly compensated employees to put in after-tax contributions in excess of any Roth 401(k) contributions.
The only problem is that almost all plans don’t allow and any voluntary contribution must be used with the plan’s matching contribution compliance testing called the ACP test and if the plan’s not a safe harbor 401(k), chances are that voluntary contributions would make the ACP fail. That detail was missing from the article.
So when you read an article with tax advice, talk to a tax expert to make sure it’s right.
