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Need help understanding 2010 ROTH conversion
Old 01-10-2011, 12:29 AM   #1
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Need help understanding 2010 ROTH conversion

For ROTH conversions made in 2010 a person must choose whether to pay 100% taxes due on the conversion by either 4/15/2011 or 50% by 4/15/2012 and 50% by 4/15/2013.

DW and I are trying to accelerate our conversions so we max out the 28% tax bracket. In 2010 DW converted $200k to ROTH and I converted $100k. We would like to spread the tax liability evenly over the 3 tax years, 2010, 2011, and 2012. (A yearly conversion of about $115k would place us close to the upper end of the 28% bracket.)

Question: (We file a joint return.) Can she elect to pay her conversion in tax years 2011 and 2012 and I elect to pay 100% of the taxes on my conversion for tax year 2010?
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Old 01-10-2011, 01:01 AM   #2
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yes.........see form 8606 pt II where you make the election to pay all
in 2010 or not http://www.irs.gov/pub/irs-pdf/f8606.pdf
You will file one form for yourself and one for spouse make the appropriate
selection on each form.

also, technically you are splitting the income into future yrs and paying at those tax rates if you don't elect paying for 2010............you aren't splitting the tax (from 2010) into future yrs.
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Old 01-10-2011, 01:39 AM   #3
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[QUOTE=kaneohe;1022645]yes.........see form 8606 pt II where you make the election to pay all
in 2010 or not http://www.irs.gov/pub/irs-pdf/f8606.pdf
You will file one form for yourself and one for spouse make the appropriate
selection on each form.

also, technically you are splitting the income into future yrs and paying at those tax rates if you don't elect paying for 2010............you aren't splitting the tax (from 2010) into future yrs.[/QUOTE

Thanks Kaneohe,

My eyesight is getting worse. With my glasses on I can see the statement (in very small print) that a separate form is to be filled out for each spouse. That is what I wanted to hear.

I knew the IRS was allowing the splitting of income (not taxes) but I must have not stated clearly.
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