Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Roth Conversion
Old 08-31-2009, 09:05 PM   #1
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 199
Roth Conversion

Over my working years, I contributed to a traditional IRA account (non-deductible) and am thinking of converting over to a Roth. Would any of these funds be taxable since it was all non-deductible? Thanks
__________________

__________________
Ginger
Ginger is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-31-2009, 09:09 PM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,068
Ginger, here is a good source of Roth IRA conversion information: Guide to Roth IRA, 401k and 403b Retirement Accounts
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 08-31-2009, 09:10 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
I'm pretty sure the earnings are taxable. The original non-deductible contributions are not.
__________________
Animorph is offline   Reply With Quote
Old 08-31-2009, 09:24 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
From REW's link: this may be relevant.........

If you made nondeductible contributions to a traditional IRA at any time in the past, and haven't previously withdrawn the nondeductible contributions, then your partial conversion will be partly nontaxable. The rules that apply here are the same as for any distribution from a traditional IRA. You treat all traditional IRAs as a single IRA, so you don't get a different result depending on which IRA you convert. You add up the total value of all traditional IRAs and also the total amount of nondeductible contributions to those IRAs to determine what percentage of the conversion amount is taxable. For example, if 60% of your IRA balance comes from nondeductible contributions and you convert $8,000 of that IRA, you'll report $3,200 of income from the conversion (40% of $8,000).

It would be nice if you could specify that you're converting only the nontaxable portion. The rules don't let you do that.
__________________
kaneohe is offline   Reply With Quote
Old 08-31-2009, 10:27 PM   #5
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 199
Thanks for the replies. I need to investigate a bit further, but it might benefit us to do a partial conversion. So in simple terms for example, if you put in $100,000 in a non-deductible IRA and earnings are $50,000 over the years, you are paying the tax on $50,000 Does that $50,000 in earnings then throw you into a higher tax bracket making tax season another nightmare?
__________________
Ginger
Ginger is offline   Reply With Quote
Old 08-31-2009, 10:44 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
You suggest but haven't said definitely that you have no other TIRAs besides this non-deductible one..........is that correct? No rollover IRAs from corporate plans?
You can use a tax calculator like this one to estimate your taxes ........you'll have
to know what your other earnings would be......wages, interest, dividends, capital gains, etc. (and your deductions too).
TurboTax® Free Tax Calculators - Free Income Tax Estimators, Tax Guides, Tax Help

it's the one in the middle.......taxcaster. You can do the estimate w/, w/o the conversion to see what impact the conversion does. Also you can do a partial conversion. The tax impact depends on your own circumstances.
__________________

__________________
kaneohe is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Conversion to Roth oldman FIRE and Money 2 07-06-2009 07:16 PM
Strategy for Roth 401k to Roth IRA conversion and withdrawals sweng85 FIRE and Money 9 04-21-2009 11:28 PM
ROTH conversion - do it now lucija FIRE and Money 45 12-07-2008 01:08 PM
Roth Conversion sarahsays Young Dreamers 15 04-08-2008 10:35 AM
Roth Conversion ferco FIRE and Money 1 06-07-2007 08:18 PM

 

 
All times are GMT -6. The time now is 05:29 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.