Comments on: Gone Daddy Gone – AGI Restriction For Roth IRA Conversion

By: * 2010 Roth IRA Conversion Rules, What Is The Big Deal?

* 2010 Roth IRA Conversion Rules, What Is The Big Deal? — Thu, 31 Dec 2009 15:50:23 +0000

[...] you can see, the Roth IRA conversion process can get complicated. Please consult your tax advisor before implementing this strategy. [...]

By: BILL MEEKS

BILL MEEKS — Wed, 16 Sep 2009 20:48:44 +0000

Good article. Read it all and had already decided that I would be converting both of our IRA’s to Roth’s next year. I’m beyond 70 1/2 and my wife will be next year.

By: Using a Roth IRA to Maximize Your Wealth » JoeTaxpayer

Using a Roth IRA to Maximize Your Wealth » JoeTaxpayer — Tue, 11 Aug 2009 12:12:35 +0000

[...] Good Financial Cents. Jeff and I had become acquainted through Twitter and after reading his posts Gone Daddy Gone – AGI Restriction For Roth IRA Conversion and Roth IRA Time To Convert, I offered to write a Roth post from a different [...]

By: Airstream and Irvin: A Nostalgic Adventure

Airstream and Irvin: A Nostalgic Adventure — Sat, 18 Jul 2009 11:46:32 +0000

[...] Daddy Gone- AGI Restriction for Roth IRA Conversion at Good Financial [...]

By: Dave

Dave — Wed, 15 Jul 2009 15:02:00 +0000

Another consideration than just brackets if you defer your 2010 conversion into 2011/12 is that the rates may change due to either 1. expiration of the bush rate reductions; 2. any new changes made to the tax law. So the analysis will be the time value of money at your 2010 rate vs an estimate of what your marginal rate in 2011/12 might be. Given much of the legislative activity points to tax increases rather than decreases its something to factor.

We are doing well, so I am leaning against taking the interest free loan and taking my lumps in 2010.

By: Best of Money Carnival #7 – Financial Collapses Edition | My Life ROI, Getting the Best Return On Life

Mon, 13 Jul 2009 10:05:35 +0000

[...] Rose presents Gone Daddy Gone – AGI Restriction For Roth IRA Conversion posted at Good Financial Cents saying "In 2010, the AGI restrictions for Roth IRA Conversions [...]

By: Carnival of Personal Finance: New Zealand Edition! | Man Vs. Debt

Carnival of Personal Finance: New Zealand Edition! | Man Vs. Debt — Mon, 13 Jul 2009 08:29:06 +0000

[...] Rose from Good Financial Cents presents Roth IRA Conversion in 2010, AGI Restricitions are “Gone Daddy Gone”! Look, I’m going to state upfront that I’m not a big fan of investing articles in [...]

By: Linksharing 7/12/2009 – Getting Your Financial Ducks In A Row

Linksharing 7/12/2009 – Getting Your Financial Ducks In A Row — Sun, 12 Jul 2009 20:17:13 +0000

[...] Financial Cents” blog wrote about the changes coming for Roth IRAs next year in the post Gone Daddy Gone – AGI Restriction For Roth IRA Conversion. This is a good run-down of the specifics of this important change in the landscape – plus [...]

By: Jeff Rose

Jeff Rose — Mon, 06 Jul 2009 15:53:20 +0000

@JoeTaxpayer

Thanks for diving into that. I actually started to mention that, but thought it might get too “gritty” for this post. Your explanation (as your blog) is spot on. Good job!

By: JoeTaxpayer

JoeTaxpayer — Mon, 06 Jul 2009 15:44:36 +0000

Jeff, another beautiful post (yup, I’m a money nerd, this stuff is beautiful to me).
One point to spell out clearly for your readers;
Say you have a mix of pre and post tax IRA money, (Not 401(k), just IRA here) even though you may have started and made deposits to an account you treated as “Non-Deductible” IRA, you need to add up all the accounts to determine what’s taxable upon conversion. Example. You have $50K in a traditional (pre-tax) IRA. You also have your Non-deducted IRA balance of $50K, which is the current balance from deposits made totaling $40K, i.e. $10K growth. Now, when you convert money from the IRA* 60% is considered taxable, regardless of which account it’s pulled from for conversion.
*I purposely say “the IRA” because as far as the IRS is concerned you only have one. It’s made up of pretax and possibly post-tax money, but regardless of the number of accounts it’s in, you still have one IRA. By the way, IRA stands for Individual Retirement Arrangement, not Account.

If you plan to convert Nondeducted money, be careful not to roll your 401(k) account to an IRA first as that money will become part of the equation. This is not that complicated, so long as you pay attention and do it right.
Joe
JoeTaxpayer´s last blog ..Thinking about Dave Ramsey