WHO IS ELIGIBLE TO CONVERT A TRADITIONAL IRA TO A ROTH IRA?
Only taxpayers with adjusted gross incomes of $100,000 or less can convert their traditional IRAs to Roth IRAs. This $100,000 AGI limit applies to both single taxpayers and married taxpayers filing jointly. A married taxpayer that files a separate return may not convert to a Roth IRA. WHAT ARE THE TAX CONSEQUENCES OF THE CONVERSION? When you convert a traditional IRA into a Roth IRA, the full amount of your deductible contributions (if any) and all the earnings on the traditional IRA immediately become taxable. The 10 percent premature distribution penalty does not apply even if you are under age 59. However, if the taxpayer uses any part of the traditional IRA to pay the tax liability, that amount will be considered a distribution, which may be subject to the 10% premature distribution penalty. SHOULD I CONVERT MY TRADITIONAL IRA INTO A ROTH IRA? The right answer for you depends on a number of important factors. You may want to consult with a CPA who can assess your individual financi
