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11-30-2006, 09:13 PM
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#1
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Full time employment: Posting here.
Join Date: Aug 2005
Location: Far NW 'burbs of Chicago
Posts: 889
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T-IRA to ROTH-IRA. When?
Recently I heard that the best time to convert traditional iras to roth iras will come in 2010. I'm not sure if that had to do with tax rates, or simply the amount that can be converted in a single year. For 2006 it's not an issue for me, had some big income this year and am in a high bracket. But 2007 and 2008 I'll be living off this year's income and probably be in the lowest tax bracket that I'll ever see.
How can i find info to learn what i CAN do, and to decide what i SHOULD do?
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Re: T-IRA to ROTH-IRA. When?
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11-30-2006, 09:24 PM
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#2
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Full time employment: Posting here.
Join Date: Jul 2004
Posts: 512
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Re: T-IRA to ROTH-IRA. When?
Starting in 2010, the maximum AGI limit of $100K to be eligible to convert will be eliminated. Also, if you do a conversion in 2010, the amount of income tax you'll need to pay can be spread over 2 years.
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Re: T-IRA to ROTH-IRA. When?
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11-30-2006, 09:56 PM
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#3
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Full time employment: Posting here.
Join Date: Aug 2005
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Re: T-IRA to ROTH-IRA. When?
Thanks. Will the two-year tax spread apply only to 2010, or could a person convert some more in 2012 and spread two years then again?
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Re: T-IRA to ROTH-IRA. When?
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12-01-2006, 09:18 AM
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#4
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
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Re: T-IRA to ROTH-IRA. When?
Its a one time thing.
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: T-IRA to ROTH-IRA. When?
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12-01-2006, 02:38 PM
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#5
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Thinks s/he gets paid by the post
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Re: T-IRA to ROTH-IRA. When?
I’ve been living on after tax withdrawals since retiring and have been in the 15% bracket. I have been converting regular IRA to Roth IRA every year up to the 15% limit. I think this will give me a lot of flexibility going forward.
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Re: T-IRA to ROTH-IRA. When?
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12-01-2006, 04:10 PM
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#6
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Recycles dryer sheets
Join Date: Nov 2003
Location: Charlotte
Posts: 360
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Re: T-IRA to ROTH-IRA. When?
So.... If I decide to convert $50k on January 2. 2010, I will have $25k taxable on my 2010 return and $25k taxable on my 2011 return, correct?
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Re: T-IRA to ROTH-IRA. When?
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12-05-2006, 09:00 PM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2005
Posts: 16,973
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Re: T-IRA to ROTH-IRA. When?
What someone told me at work is to contribute to an after tax IRA (high income so can't do pre tax)....
Then convert in 2010... only have to pay tax on the income from now to then!!!
Any holes in this 
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Re: T-IRA to ROTH-IRA. When?
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12-06-2006, 09:34 AM
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#8
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
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Re: T-IRA to ROTH-IRA. When?
 Quote:
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Originally Posted by Texas Proud
What someone told me at work is to contribute to an after tax IRA (high income so can't do pre tax)....
Then convert in 2010... only have to pay tax on the income from now to then!!!
Any holes in this |
No. I have thought about doing the same thing. They might change the law so we can't convert, but heck, how much money can we put in an IRA between now and then anyway?
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: T-IRA to ROTH-IRA. When?
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12-06-2006, 10:37 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Posts: 2,670
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Re: T-IRA to ROTH-IRA. When?
Quote:
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Originally Posted by gindie
Starting in 2010, the maximum AGI limit of $100K to be eligible to convert will be eliminated. Also, if you do a conversion in 2010, the amount of income tax you'll need to pay can be spread over 2 years.
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Although electing to spread over the 2 years may not end up being the smartest move for some people.
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Re: T-IRA to ROTH-IRA. When?
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12-06-2006, 11:49 PM
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#10
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Full time employment: Posting here.
Join Date: Aug 2005
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Re: T-IRA to ROTH-IRA. When?
Quote:
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Originally Posted by retire@40
Although electing to spread over the 2 years may not end up being the smartest move for some people.
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Offhand, I can't think of very many situations where the 2 year spread would be unwise. Can you please post some of your examples?
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Re: T-IRA to ROTH-IRA. When?
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12-07-2006, 07:02 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Posts: 2,670
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Re: T-IRA to ROTH-IRA. When?
Quote:
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Originally Posted by Gearhead Jim
Offhand, I can't think of very many situations where the 2 year spread would be unwise. Can you please post some of your examples?
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One major reason is that the income tax rates are set to revert back to the higher old rates after 2010.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
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Re: T-IRA to ROTH-IRA. When?
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12-07-2006, 11:10 AM
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#12
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Full time employment: Posting here.
Join Date: Aug 2005
Location: Far NW 'burbs of Chicago
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Re: T-IRA to ROTH-IRA. When?
Quote:
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Originally Posted by retire@40
One major reason is that the income tax rates are set to revert back to the higher old rates after 2010.
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Yes, that could be a big issue.
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Re: T-IRA to ROTH-IRA. When?
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12-07-2006, 01:42 PM
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#13
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Recycles dryer sheets
Join Date: Jun 2006
Posts: 229
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Re: T-IRA to ROTH-IRA. When?
My situation is admittedly off-beat...but the taxation of 2010 conversions is deferred into 2011 and 2012. 2012 is the year I start Social Security. The additional income I'd have to recognize in 2012 added to 1/2 my social security benefit and RMDs would push me over the $44,000 limit for 85% social security taxation.
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