Comments on: 2010 Traditional IRA to Roth IRA Conversion Tax Rules

By: JB

JB — Thu, 28 Jan 2010 05:32:45 +0000

@ Karen H

Yes, the are considered separately.

One spouse can elect to pay all tax in 2010, while the other can defer for 2011 and 2012.
JB´s last blog ..Should You Annuitize with an Immediate Annuity?

By: JB

JB — Thu, 28 Jan 2010 05:31:25 +0000

@ msb. You will just need to add the total amount for each party that is looking to convert. If the husband just wants to convert, then just add his and vice versa.

By: Rich K

Rich K — Mon, 18 Jan 2010 00:20:25 +0000

Best article I have seen on the complications of converting an IRA to a Roth IRA when you have multiple pre/post-tax IRAs. I wish other magazine articles had been as well researched. Can anyone answer above question from Karen? I believe individuals are treated seperately on form 8606 (but I’m no expert). Also in Jeff’s example of Bentley, does the $5894 tax payment convert a portion of his rollover IRA from pre-tax to post-tax? Seems like it would, but its not clear to me how you would keep track of it….

By: Karen H

Karen H — Sun, 22 Nov 2009 00:50:14 +0000

I have a question with regards to married couples and conversion. Are the IRA accounts considered separately? I have a larger rollover IRA, but my husband doesn’t have a rollover IRA. Is the percentage of non-deductible contributions calculated separately? i.e. his accounts separate from my accounts? Second question – can we choose separate tax treatment for his conversion than from mine? In other words, can we pay the taxes on his conversion in 2010 and defer the taxes on my conversion to 2011 and 2012?

By: msb

msb — Sun, 15 Nov 2009 05:40:23 +0000

In calculating amounts in all IRAs for a joint filing do we need to add up all IRAs for both the husband and wife or is each set of IRAs (husband and wife’s seperate IRAs) treated seperately for calculating tax liability? Thanks

By: Kyle V

Kyle V — Wed, 11 Nov 2009 19:48:30 +0000

Thanks for the great article. One thing that I wasn’t quite clear on was the 2010 benefit of spreading the conversion income over 2011 and 2012. If I understand you correctly, I have the option of paying all the 2010 Roth conversion taxes when I file my 2010 taxes OR I can spread the taxable income over tax years 2011 and 2012, correct? If I would elect to spread the conversion taxable income over 2011 and 2012, then I don’t (can’t) attribute any of the Roth conversion in 2010. Ideally, I would want to spread out the 2010 conversion over the three tax years 2010, 2011, and 2012 to help ensure I stay in a lower marginal tax bracket. Is there a way to do this?

By: Angela

Angela — Mon, 02 Nov 2009 20:10:42 +0000

Jeff,
Great article! I still have a quick question. Both my husband and I have pre-tax and after-tax traditional IRA accounts. We’re filing joint tax returns. If we convert only my traditional IRA accounts to Roth IRA but keep my husband’s accounts in traditional IRA, do I need to include my husband’s IRA balances in the calculation to determine after-tax portion of the conversion?

Thanks a lot for your clarification!

By: Scott

Scott — Mon, 02 Nov 2009 01:50:18 +0000

Sorry, I should have written:
“Or will 2010 be viewed in it’s entirety and include the time later in the year when I also have a *PRE* tax IRA (from the 401k rollover)?” …thus requiring the % allocation

By: Scott

Scott — Mon, 02 Nov 2009 01:47:24 +0000

Thanks Jeff, great article.
I understand the math of converting to a Roth when you own both a non deductible IRA and a deductible IRA. My question is timing.

Currently I have only a non deductible IRA that I look forward to converting 100% to a Roth in 2010 (have to wait due to income). However, *later* in 2010 I have an old 401k that I plan to roll over to a regular IRA (new employer 401k investment options stink).

So I’m wondering if I can get away without doing the % allocation between deduct and non deduct IRA b\c when I do the conversion I will have *only* the non deductible. Or will 2010 be viewed in it’s entirety and include the time later in the year when I also have an after tax IRA (from the 401k rollover)?

If I have to, I’m assuming I can wait to convert the old 401K to an IRA the next year and 2010 will be cleared for the conversion to a Roth.

Thanks!

By: The Best of the Best in Money and Personal Finance #7

The Best of the Best in Money and Personal Finance #7 — Sun, 04 Oct 2009 23:54:38 +0000

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