Rollover from traditional IRA to Roth IRA?

Question

I have opened traditional IRA and Roth IRA account this year. Now I found out that since I am enrolled in emplyer retirement plan and my income level doesn't match to get deduction for traditional IRA. I am thinking of converting traditional IRA funds to Roth IRA. Can I do so without any panelty?

Answer 1

You can roll over a traditional IRA to a Roth IRA. You will have to pay federal income tax on the money rolled over. There is no 10% early withdrawl penalty on top of the taxes.

Answer 2

nicely, if that's remotely achievable, he had extra perfect be up on the 1st mild the next day. I at present have 2 iras with one custodian. One is a nicely-known IRA, the different is a ROTH. i will at any time (inclusive of up until eventually 5 minutes in the previous last on 12/31) go in and roll funds from IRA to my ROTH. I decline having any taxes held out. they'll then difficulty me a 1099-R showing the quantity rolled over. Then as quickly as I do my taxes, I placed the quantity rolled over on the kind as taxable earnings, yet because of the rollover (you relatively write "rollover" on the kind), no penalty. I pay the tax bill out of different money. on condition that your fiance in effortless terms made $3300 this 3 hundred and sixty 5 days and is possibly no longer being claimed by utilising all of us, he ought to roll $5450 over an nevertheless no longer pay any taxes. that's because of the fact the 1st $8750 isn't taxed and he had room left. Above that he might commence paying at 10% on the subsequent $7850. in case your boyfriend *would not* have already got the ROTH, however the IRA account is held at a close-by corporation, he can attempt going first ingredient. it would take an hour to establish the ROTH and then roll the money over. The types ought to be stamped as processed in the previous they close and that they close in the previous 5pm.

Answer 3

I would still suggest keeping the 401k/retirement plan with your employer. If your employer matches any contribution to your retirement plan, keep it with your employer. There's no way you can switch to Trad IRA to Roth IRA without a tax penalty.
Regarding your income level, you should be able to deduct any contribution to your Trad IRA from your earnings (although I would consult a tax advisor on that matter just to be 100%).

Answer 4

you will have to pay taxes since the tradtional IRA was funded with tax free money. If you can take the hit you should. because your Roth is tax free after that and you don't pay taxes on the withdrawl like the traditional IRA