I have been making contributions to both a 401K and IRA for the past
4.5 years, but recently parted ways from the company with which I had the 401K. I have about $79K in the 401K and $14K in the IRA.I believe that a Roth makes more sense for me long term and would like to roll both into a Roth IRA, but now I need to consider the tax implications.
First, if I use some of the cash from the 401K/IRA to pay the taxes, that would be considered a disbursement for which I would pay a penalty, correct? So I would need to pay those taxes using other means to avoid that penalty.
Second, I will be in school in the fall. Technically, I will be in school full time and working full time (Executive MBA). Now as I understand it, the tuition for an Executive MBA might or might not be deductible, but if I want to deduct it, I should prepare to be audited and be able to make a strong argument that it is truly a business expense, correct?
Third after I am enrolled, can I take a disbursement from the IRA and avoid the penalty by claiming it as being for educational expenses, but then use the money to pay the taxes on the rollover?
Thanks in advance for any help that anyone provides!