How Do You Convert IRA To Roth IRA?
• Determine if you are eligible to convert your traditional IRA to a Roth IRA. Current laws state that you can only proceed with the conversion if your adjusted gross income is less than $100,000 per year. This income restriction is the same for people who file their taxes as singles and people who are married and filing jointly. • Consider your finances and whether or not you will be able to pay the taxes that you will incur when converting a traditional IRA to a Roth IRA. • When you make such a conversion, you will be required to pay taxes on any pretax contributions or earnings that you had in the traditional IRA. • You pay these taxes upon conversion because you draw tax-free payments from a Roth IRA at retirement. And, money taken out of a traditional IRA is considered to be income. • Take the heirs of your IRA into consideration when determining whether you should convert or not. Converting to a Roth IRA may mean more money for your heirs. Traditional IRAs require minimum withdra
