Roth conversion from my IRA to Spouse’s Roth?

[Machine99]

Curious if it’s possible when doing a Roth conversion from my IRA, if it can go into my spouse’s Roth instead of mine? Married filling jointly.

She’s a couple years older and we want to be able to access money without penalty sooner if needed.

Thanks!

 

[audreyh1]

No. You have to open your own Roth. IRAs are individual and can’t be mixed.

 

[kgtest]

No. The account is an individual account. Imagine the messes if you could though! Divorce would be a lot more fun. Probate, get outta here!

 

[Machine99]

Thanks for the replies.

 

[Koolau]

If you want to "fund" your DW's Roth (one that she has already opened) you could use cash from your tIRA. Cash is fungible. But no direct transfers from yours to hers. For instance, I have often funded my kids' Roths with my money. Just send a check to the custodian and tell them which account/which person it's for.



As far as I know, funding your wife's Roth (assuming she has the required income to allow funding that year) would make no difference in, for instance, the taxes you would pay within that year. I'm no expert, so YMMV.

 

[CRLLS]

If you want to "fund" your DW's Roth (one that she has already opened) you could use cash from your tIRA. Cash is fungible. But no direct transfers from yours to hers. For instance, I have often funded my kids' Roths with my money. Just send a check to the custodian and tell them which account/which person it's for.



As far as I know, funding your wife's Roth (assuming she has the required income to allow funding that year) would make no difference in, for instance, the taxes you would pay within that year. I'm no expert, so YMMV.

I believe fund a spouse's or child's tIRA or Roth, you are limited to the annual contribution limit for each and you must have "earned income" equal or greater than the total amount being funded.

 

[RASAP]

I didn't actually do it but today when I did my conversion at Vanguard, when I got to the point where I had to select which account the conversion was to go to, I was given the option of either my Roth or my spouses Roth

 

[gauss]

I didn't actually do it but today when I did my conversion at Vanguard, when I got to the point where I had to select which account the conversion was to go to, I was given the option of either my Roth or my spouses Roth

This doesn't sound right.

If you cross-mingle funds between spouse and your IRAs in the transfer/rollover/conversion processes you may get yourself into a excessive contribution situation. Usually the IRA custodians are good at preventing this up front.

The only time this is allowed, as mentioned above, is the yearly regular contributions. These regular annual contributions can be contributed to either spouses IRAs as long as the couple
has total earned income in excess of the contribution total. If the couple does not file jointly, (ie married filing separately) then this may cause further restrictions.

Were the source of the converted funds from outside Vangaurd?

-gauss

 

[RASAP]

This doesn't sound right.

If you cross-mingle funds between spouse and your IRAs in the transfer/rollover/conversion processes you may get yourself into a excessive contribution situation. Usually the IRA custodians are good at preventing this up front.

The only time this is allowed, as mentioned above, is the yearly regular contributions. These regular annual contributions can be contributed to either spouses IRAs as long as the couple
has total earned income in excess of the contribution total. If the couple does not file jointly, (ie married filing separately) then this may cause further restrictions.

Were the source of the converted funds from outside Vangaurd?

-gauss

I agree. I certainly didn't expect to be able to convert from my IRA to my spouses Roth but the option was there. My bet is that had I chosen her Roth, it would have not counted as a conversion. The conversion I did was all within Vanguard.

 

[Exchme]

I didn't actually do it but today when I did my conversion at Vanguard, when I got to the point where I had to select which account the conversion was to go to, I was given the option of either my Roth or my spouses Roth

When you want to move money around, Vanguard just lists all the accounts that are yours or that you have Full Agent Authorization for, they are not offering tax advice.

My understanding of the tax laws are that Roth Conversions from your IRA to spouse's Roth are not allowed and would be an excess contribution to spouse's Roth, that would be subject to 6%/year penalty until withdrawn. It could be fixed by October 15 of the following year without penalty as long as the incorrect amount and any gains on it were withdrawn, if the tax return had already been filed, an amended return would need to be filed.

As an aside, for people that made excess contributions long ago, the SECURE 2.0 passed an update on the statute of limitations. It used to be that the clock started when you filed form 5329, telling them you messed up and how much tax you owed, meaning the statute of limitation clock never actually started, so IRS could go waaaay back at any time. SECURE 2.0 updated the law to start the statute of limitations clock when you file taxes for the year. So folks that made a boo-boo long ago are now off the hook.

 

[MarieIG]

I was unaware of the ability to effectuate such a transfer - without a QDRO (Qualified Domestic Relations Order).

 

[copyright1997reloaded]

I believe fund a spouse's or child's tIRA or Roth, you are limited to the annual contribution limit for each and you must have "earned income" equal or greater than the total amount being funded.

This is what I do with my child. I gift money to help fund a Roth IRA and Roth 401k (but I also make sure there is enough earned income for this to be legit).

 

[Sunset]

When you want to move money around, Vanguard just lists all the accounts that are yours or that you have Full Agent Authorization for, they are not offering tax advice.

My understanding of the tax laws are that Roth Conversions from your IRA to spouse's Roth are not allowed and would be an excess contribution to spouse's Roth, that would be subject to 6%/year penalty until withdrawn. It could be fixed by October 15 of the following year without penalty as long as the incorrect amount and any gains on it were withdrawn, if the tax return had already been filed, an amended return would need to be filed.

As an aside, for people that made excess contributions long ago, the SECURE 2.0 passed an update on the statute of limitations. It used to be that the clock started when you filed form 5329, telling them you messed up and how much tax you owed, meaning the statute of limitation clock never actually started, so IRS could go waaaay back at any time. SECURE 2.0 updated the law to start the statute of limitations clock when you file taxes for the year. So folks that made a boo-boo long ago are now off the hook.

Just asking for a friend..... . how long is the statue of limitations on Roth mess ups

 

[Koolau]

I believe fund a spouse's or child's tIRA or Roth, you are limited to the annual contribution limit for each and you must have "earned income" equal or greater than the total amount being funded.

Correct! Sorry I didn't make it clear.

 

[Koolau]

Just asking for a friend..... . how long is the statue of limitations on Roth mess ups

Heh, heh, 'til they catch you. Not statute if they don't find out, I guess.