The Year of the Roth

[twacowfca]

I understand; that is my plan. I guess Florida, Nevada, Texas, Washington, NH are the options.

 

 

Plus Tenn.

[twacowfca]

14 days left!

 

Conversions of regular IRA's (or 401K's if you are 59_ or older) to ROTH IRA's are even more compelling with the passage of the US tax bill yesterday.

 

Taxes won't be rising. Therefore, it makes sense to defer the taxes on the conversion as allowed by law 50:50 to be assessed in the 2011 and 2012 tax years.

 

If something unexpected should happen before October 31, 2011, the conversion can be undone without penalty, and the account will revert back to a regular IRA.  :)

[jasonw1]

Is this only available in 2010? I couldn't find anything which states the Roth conversion can't be done in 2011 or later, so I assume this is still doable? I understand the tax defer is only for 2010.

[Packer16]

Another option is to partially convert your regular IRA over a number of years so you can manage your income that you will pay the additional tax on.  This may be the best option if lower tax rates are exchanged for fewer deductions in the new tax law.

 

Packer

[twacowfca]

Is this only available in 2010? I couldn't find anything which states the Roth conversion can't be done in 2011 or later, so I assume this is still doable? I understand the tax defer is only for 2010.

 

OK anytime for low to moderate income income taxpayers with small, regular IRA's, I think.  Otherwise, you snooz, you lose. 8)

 

 

Clarification: The year end tax bill does allow conversions of regular IRA's to Roth's in future years without limitation by income.  Conversions executed in 2010 are eligible for deferral of one half of taxes due on the conversion to tax year 2011 (due in 2012) and the other half due to tax year 2012 (due in 2013).  However, conversions made after 2010 will necessitate tax payments on the conversion that are due in full by tax day after the year of conversion.

[jasonw1]

I wanted to confirm whether the roth coversion can be done in 2011, regardless of AGI limit, looks like it can done.

 

http://www.irs.gov/publications/p590/ch02.html#en_US_publink1000230961

 

"Conversions to Roth IRAs. Beginning in 2010, the modified AGI and filing status requirements for converting a traditional IRA to a Roth IRA are eliminated.Also, for any 2010 rollover from an IRA other than a Roth IRA to a Roth IRA, any amounts that would be included as income will be included in income in equal amounts in 2011 and 2012. You can choose to include the entire amount in income in 2010. "

 

 

[shalab]

I wanted to confirm whether the roth coversion can be done in 2011, regardless of AGI limit, looks like it can done.

 

TD Ameritrade says it can be done.

 

[bargainman]

I wanted to confirm whether the roth coversion can be done in 2011, regardless of AGI limit, looks like it can done.

 

http://www.irs.gov/publications/p590/ch02.html#en_US_publink1000230961

 

"Conversions to Roth IRAs. Beginning in 2010, the modified AGI and filing status requirements for converting a traditional IRA to a Roth IRA are eliminated.Also, for any 2010 rollover from an IRA other than a Roth IRA to a Roth IRA, any amounts that would be included as income will be included in income in equal amounts in 2011 and 2012. You can choose to include the entire amount in income in 2010. "

 

 

 

plus with the extension of lower income tax into the next 2 years it'll be a no brainer to pay the taxes in 2011/12 instead of in 2010.