Roth IRA Conversions – Spreading the Taxes
www.rothira-advisor.comNoted retirement planning expert James Lange shares some of his tips on how to plan for retirement and beyond. Jim has dedicated his life to helping others achieve their goals for a healthy and happy retirement.
Traditional to Roth IRA Conversions and the 1-year time limit.?
In October 2006 I rolled over my old 401k to a new traditional IRA at Vanguard, where I had an existing roth IRA. This year I wanted to take advantage of my low tax-rate and convert the new traditional/rollover IRA into the existing roth IRA, which I did last month. The people at Vanguard explained to me that this would be a taxable event, without penalty. So can I claim that distribution in my income tax at the end of 2007 and pay the applicable taxes without taking any distributions from the IRA? In addition, I would like to transfer the roth IRA to Fidelity and am wondering if I can do that now or do I have to wait until March 2008?
Thank you for the answers. I want to clarify one point. Since I rolled over from traditional to roth, I need to pay that tax as income but the funds for the tax need not come out of the IRA? Can I pay the tax with other funds? In other words, I don’t need to withdraw funds from the IRA in order to pay the tax if I don’t want to.
Slagle Financial – Roth IRA Conversions, New Tax Policies
Chad Slagle, President of Slagle Financial, appears on News Channel 5 to discuss Roth IRA conversions, capital gains and dividends taxes, and estate taxes.