Help! Roth conversion problems.

[Guest Gordon]

In 1998 I had converted a 401k from a previous employer to a Trad. IRA to a Roth IRA. After doing taxes I discovered our AGI was 106,000 (I thought 150,000 was the magic number) due to a car allowance from my employer which was included into my AGI but was ment to take care of car expenses for work. The payment was always given as a seperate check. Without this amount we would have been under 100,000 with no problem. What must I do now ? Are there any clauses that can help me keep my conversion where it is?

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Gordon

[Guest taxsolutions]

If you are married the limit is $150,000. single is $100,000.

[John G]

The previous comment is not correct. The 150K threshold does not apply to Roth conversions. I believe that 100K AGI is the appropriate income limit for your 98 conversion qualification.

Concerning your $106K 1998 income, atleast check with your accountant before you throw in the towel. If you try to qualify again in 1999, you may want to try and shift any special car payments or bonuses into Jan 2000. You have more options if you are either self employeed or own your own business. Good luck.