IRA and tax deadline

[Guest brenkarch]

I have a question about whether to pay taxes on a Roth IRA conversion for 2005 or whether to wait until 2006.

I had money in a state Teacher Retirement System account (pre-tax). I took it out in late 2005, and put it into a Traditional IRA, which was then recharacterized into a Roth IRA. But, by the time it was recharacterized, it was already January 2006.

Can I pay taxes on this for 2005? I haven't gotten any sort of form from the company handling my IRA (they said they will send it out for 2006). I'd much rather pay it in 2005 than in 2006, since I'll be in a completely different income bracket next year.

Thanks,

Brendan

[txdd]

Unfortunately for you, conversion taxability only applies in the actual year of conversion, apparently 2006 in your case.

Another concern is that conversion eligibility must also be accessed for the year of conversion. If your 2006 modified adjusted gross income will be greater than $100000, you will have to recharacterize (undo) the conversion.