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Should I Convert To A Roth IRA?

If your income is $100,000 or less and you are single or married, filing jointy, you may be eligible to convert your traditional IRAs to a Roth IRA in order to take advantage of federally tax-free earnings in the future.

You will generally pay ordinary federal income tax (but not the 10% penalty tax) on the taxable amount that is converted. Your tax-free potential is maximized if you pay the taxes from your current income or personal savings, not your IRA.

Please note that beginning in 2010 the $100,000 adjusted gross income limit for conversions to Roth IRAs is permanently repealed. From 2010 onward, all taxpayers, regardless of income, can convert to Roth IRAs. Also, for conversions occurring in 2010, the taxpayer will only have to report one-half of taxable income in 2011 and one-half in 2012. After 2010, conversions must be reported in full in the taxable year in which they are made.


Assumptions

  1. 1) Pay taxes from non-IRA assets
    2) Pay taxes from proceeds of Roth conversion

Get In Touch

At BMY, we've been serving the accounting needs of Stephenville, TX and the surrounding areas for years. If you need help managing any aspect of your home or business's finances, we want to hear from you.

Please fill out this form and let us know how we can be of service. We will happily offer you a FREE initial consultation to determine how we can best serve you.

Thank you for visiting. We look forward to working together!

BMY

3020 NW Loop,
Stephenville, TX 76401
T: (800) 670-5411
E: info@bmy-cpa.com
1115 Waters Edge,
Granbury, TX 76048
T: (817) 279-7052
330 N Patrick,
Dublin, TX 76446
T: (254) 445-3607


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