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Tax year for Roth conversions

I am going to top out the 15% tax bracket in 2008 with a Roth conversion on a portion of a rollover. This appears to be a good time to do some of the conversion.

Questions

1) if I do some of the conversion for 2008 now, can I do an additional rollover in February (at tax time) and have that conversion apply to my 2008 tax return?

I read pub 590 and could not find a DATE a conversion needs to be done by for a given tax year.

I am assuming NO, all my conversions need to be done by Dec 31 so my Rollover custodian can issue a 1099 R.

2) If I "over convert" if I do a rollover now, can I recharactorize the conversion in February (at tax time) and have the recharactorization apply to the 2008 tax year?

feel free to link or quote an IRS pubs so I can interpret for myself. Thx.

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Reply to
jIM
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Additional question- what is the AGI limit for doing Roth conversions. 100k is listed in pub 590- does that limit change from tax year to tax year? Does the conversion increase AGI (and make a person ineligible for converting past an AGI of 100k)?

AGI for 2007 was 103k. We are close to that this year too.

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Reply to
jIM

There's some information about computing the MAGI for Roths here:

Brian

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Reply to
Default User

It does have to be done by Dec. 31 and you're right that this is not explicitly stated. But there are plenty of references to the conversion occurring during the "tax year".

Yes, given some caveats. See the section "How Do You Recharacterize a Contribution" in Chapter 1 of pub 590.

This limit does not change from year to year (although I suppose it is possible for new legislation to change it).

Conversion does increase AGI, but the income limit for conversions is based on a modified AGI which does not include the conversion. See the "Modified AGI" paragraph of the "Can You Contribute to a Roth IRA" section in Chapter 2 of pub 590.

-Will

william dot trice at ngc dot com

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Reply to
Will Trice

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