How Do You Convert An IRA To A Roth IRA For Taxes?
Traditional IRAs and Roth IRAs are two types of individual retirement accounts. However, they differ significantly on the tax benefits offered. A traditional IRA allows you to deduct contributions, but withdrawals are taxed. A Roth IRA does not grant a tax break for contributions, but withdrawals at retirement are tax-free. Most people choose to convert money from a traditional IRA to a Roth IRA for the tax benefit of being able to withdraw money from the account tax-free at retirement. However, you may also want to convert because Roth IRAs are not subject to required minimum distributions or because you want to consolidate your retirement accounts. Contact your financial institution to set up an IRA conversion. You will need to provide your account information, as well as the information for the Roth IRA that the money will be transferred to. Wait to file your taxes until you receive a form 1099-R that shows that amount of the conversion. Complete form 8606, part II, to determine the
