ROTH-IRA CONVERSIONS

What is a Roth-IRA?

A retirement account that creates a Tax Free Income for participants and beneficiaries.

How does a Roth-IRA compare to a Traditional IRA? (pdf)

Two Types of Roth-IRAs (pdf)

  1. Annual Contributions
    • Roth-IRA
    • Roth-401(k)/Roth-403(b)

     

  2. Conversion from IRA, SEP-IRA, Simple-IRA (after 2 year hold), 401(k) to Roth-IRA
  3. Caution: Simple-IRA’s opened less than two years are not eligible for a Roth-Conversion and are subject to a 25% penalty tax.

Current Owner IRA Qualified Plans
(if plan allows)
Original Owner Yes Yes
Inherited by Spouse Yes Yes
Inherited by Non-spouse No Yes
  • Now anyone can do a Roth conversion
    - The $100,000 MAGI income limit is permanently repealed.
    - Married individuals filing separately will be able to do a Roth conversion.
  • 2010 conversion has option to pay income taxes in 2010 or spread the taxable income on the conversion amount equally over 2011 and 2012.
  • 2011 conversion all taxes paid in 2011

ROTH-IRA Conversions

Caution: Age 70 1/2 Required Minimum Distribution must be taken before converting to a Roth-IRA

For a Roth-IRA Conversion analysis or questions email Harry Rubins.
General information only – review with your tax advisor before taking action.

Site Designed and Maintained by: Spinning A Web Marketing