Taxing of an IRA-Roth conversion

[Michael Devault]

Yes, the amount converted from a traditional IRA to a Roth IRA is included in gross income for the year in which the conversion is made. That means you will have to pay tax on the amount converted.

However, the amount converted does not count in determining whether you can make the conversion. If your adjusted gross income, excluding the anticipated conversion amount, is greater than $100,000, you can't convert to a Roth IRA.

Hope this helps.

[Guest JoeMac]

I am going to convert a traditional IRA to a Roth IRA. My question is, does the converted amount count toward income for that year. I thought it would count as taxable income thus possibly pushing into a higher tax bracket. So if I am married filing jointly with 43,000 in taxable income a conversion of 10,000 would for the most part be taxed at 28%, is that correct? Thanks in advance.

[Guest JoeMac]

Thanks for the information.