I converted from IRA to Roth and may have exceeded $100,000 AGI.

[Guest Wade]

I converted my regular IRA to a Roth IRA earlier in 1999. My wife and I are both employed, both contributing to retirement plans, filing jointly. I thought our AGI would be under $100,000. Now it appears we may exceed this by approx. $ 5,000. I have a very small stake in an S-Corp. and will not know my income from that until late Feb. (I have included my estimate in the above AGI). It is now Y2K. Is it too late to convert back. If I pay a 10% penalty, do I have to remove the funds from my Roth? Can I still convert back? I do not think the S-Corp can defer my income. Any comments?

[John G]

You do not have to pay a penalty. You can undo the conversion before you file your 1999 taxes later this year. Talk to your S-corp folks and make sure you get timely info from them.