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Traditional to Roth conversion still OK?

For the last couple of years, I've had all of my retirement money exclusively in 401(k). Because of my income, I'm not eligible to contribute to a Roth directly.

So, instead I have been contribution to a non-deductible traditional IRA and then immediately converting to a Roth, thereby avoiding any taxation in the process and still contributing to a Roth.

So far, everyone I have asked (including folks at the IRA custodian) say this is fine. I've also asked on the newsgroups. And of course, all of this is being reported on my returns.

I was planning to do it again this year. Have the laws changed in any way to make this not doable?

Thanks, Anoop

Reply to
anoop
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This is OK so long as you have no other raditional IRA accounts.

If you have oher traditional IRAs, you hav to combine them all on Form 8606 and calculate the pro rata tax basis each time.

Reply to
Arthur Kamlet

As Art Kamlet stated, this only works the way you want if you have no other balances in any Traditional IRA accounts other than the non-deductible contributions you have made.

I am not aware of any law changes (new laws, or expiration of old laws) from 2011 to 2012 tax year that would change your scenario. But of course, tax law for 2012 tax year is not a done deal by any stretch of the imagination.

Reply to
Mark Bole

Thanks. Before I started doing this, I did have a Rollover IRA which I then rolled back into my then employer's 401(k). So, since I started doing this, all I have is a Roth IRA and the non-deductible IRA which I have been rolling over immediately each year.

Thanks. That's what I wanted to check on. Sometimes things change when I'm not paying attention. :)

Anoop

Reply to
anoop

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