Jan 1

This is my scenario. I currently have a ROTH IRA. For this and next year I would like to take out a traditional IRA, and in a few years (2010) convert this to my current ROTH IRA. I had read somewhere I thought you can only do a rollover like this one time. Does anyone know the rules on this? Thanks!
Thanks for the answers. I know it’s kind of tricky. I would rather get the tax break now and pay the taxes in a couple of years because of my financial situation. But i would want to do it all at once. For example, rollover the total of all my traditional IRAS into my existing ROTH. Don’t mind paying the taxes at that time, but dont want it counted as a withdrawl and get penalized, etc. I eventually just want it all in one account. I’m just scared there is a catch somewhere ( or will be in 2 or 3 years). Several years ago, they let you do that rollover thing all at once, and I did do it at that time.
To the last response from TBONE. You mentioned in 2010 you can rollover a traditional ira into a roth ira…this is the whole crux of my concern…I know I can roll it into “an IRA” but can I roll it into “an existing IRA” that I had before i started opening up the traditional iras?
Thanks!


7 comments so far...

  • pbmaster Said on January 1st, 2010 at 8:47 pm:

    Yeah you can.

  • hailey Said on January 1st, 2010 at 9:16 pm:

    you can do it,… it pretty much no different than contributing to a 401K getting canned and rolling the monies from the company managed account in to a self managed fund. you can have 12 different jobs in a year and get canned 12 times and roll each into a self managed account

    the one time thing does not apply to rollovers

    you only pay taxes if a check is ever made payable to you,.. if the money truely “ROLLS” into another account it remains tax free

  • linlyons Said on January 1st, 2010 at 10:06 pm:

    why?
    are you making a lot of money this year?
    you have to pay taxes when you transfer.
    and it’s likely counted as an IRA withdrawal, with all the rules that apply.

  • are_see_bee Said on January 1st, 2010 at 10:40 pm:

    Right now, you still can convert – up to the allowable about to invest in a ROTH for that year. NO telling what will happen in the next few years, though as they are constantly changing the rules.

  • mlow936 Said on January 1st, 2010 at 10:56 pm:

    yes.

  • TBone Said on January 1st, 2010 at 11:36 pm:

    For years before 2010, you aren’t allowed to convert a traditional IRA to a Roth if your modified adjusted gross income is above $100,000. The same $100,000 limit applies to the overall income of couples filing jointly as singles (something of a marriage penalty), and individuals who are married filing separately aren’t allowed to do a Roth conversion at all. The Tax Increase Prevention and Reconciliation Act, which became law in May 2006, eliminates this limitation beginning in 2010. If you have a traditional IRA, you’ll be allowed to convert it to a Roth IRA without regard to how much income you have and without regard to your filing status.
    The law includes a special rule for conversions that occur in 2010. For that year only, unless you elect otherwise, income from a conversion will not be reported in 2010, but instead will be reported in two equal installments in 2011 and 2012. The income will be accelerated, however, to the extent you take withdrawals before 2012.

  • Truth is best option to trust Said on January 2nd, 2010 at 12:28 am:

    Yes you can rollover a Traditional IRA into an existing Roth IRA. If you have multiple Traditional IRAs, you can roll them all over into your existing Roth IRA.

    Right now, the rule says that if you rollover your 401k into a Traditional IRA, you must wait one year to roll it over again into a Roth IRA. In 2010, you can roll over your assets into a Traditional or a Roth IRA.

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