Hi:
I have some funds in a roll over IRA account. Which has IRA since 1998. I am 37+ years old. To avoid confusion at a later date I want to convert all my IRAs to ROTH IRAs. How do I go about it.
Thanks,
Gary
2007-02-10 07:42:27 · 4 answers · asked by Gary 1 in Business & Finance ➔ Taxes ➔ United States
We will file jointly about 110 this year.
2007-02-10 07:51:48 · update #1
I mean 110,000.
2007-02-10 07:53:03 · update #2
If your total Adjusted Gross Income exceeds $100,000.00 you can not covert a Tradional IRA to A Roth IRA.
TheTax Law has not been passed to change this for 2010 as of today.
2007-02-10 08:13:11 · answer #1 · answered by Anonymous · 1⤊ 2⤋
The tax that you hand over to the taxman on conversion could easily pay for many years of service from a competent accountant who can make sure there is no "confusion."
You can have tax relief on an IRA once. You either get it when you make the contribution or you get it when you draw out the funds. You do not get it both ways. If you're earning $110,000 and this is an average year for you, I would have thought that a traditional IRA is more beneficial than a Roth. Sure, you will pay tax in retirement but it is likely to be at a lower rate than now.
2007-02-10 07:58:37 · answer #2 · answered by skip 6 · 0⤊ 2⤋
If you mean your income is about 110K then you can not roll your IRA into a ROTH just yet. Used to be you couldn't. Now in 2010 the law will allow it.
Call your broker and they will take care of everything. In 2010 the AGI limit is removed for the rollover.
Rob is not correct about the Income limit:
Income limit on conversions eliminated. --For tax years beginning after December 31, 2009, the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) eliminates the $100,000 adjusted gross income limitation on a conversion of a traditional IRA to a Roth IRA (Code Sec. 408A(c), as amended by the Tax Reconciliation Act of 2005). This provision does not sunset.
Ratable inclusion in gross income over two-tax-year spread. For conversions in 2010, the taxpayer recognizes the conversion amount ratably in adjusted gross income (AGI) in 2011 and 2012 unless the taxpayer elects to recognize it all in 2010 (Code Sec. 408A(d)(3)(A)(iii), as amended by the Tax Reconciliation Act of 2005).
2007-02-10 07:59:14 · answer #3 · answered by smh60437 3 · 1⤊ 2⤋
Just tell whomever your IRA custodian is and they can switch it. Be aware that you will have to pay taxes on the amount of money that you convert.
2007-02-10 07:47:06 · answer #4 · answered by Sabina 5 · 1⤊ 1⤋