IRA to Roth Conversion Deadline

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python99
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Joined: Fri Feb 15, 2013 1:15 pm

IRA to Roth Conversion Deadline

Post by python99 » Wed Jul 02, 2014 12:14 pm

The question is do IRA to Roth conversion have to be made in calendar year or can you wait until you do your taxes and convert prior to the April 15 deadline similar to a IRA contribution

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laughlinlvr
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Location: ID, NV

Re: IRA to Roth Conversion Deadline

Post by laughlinlvr » Wed Jul 02, 2014 12:46 pm

The date you make the conversion sets the calendar year for tax reporting purposes. There's no Apr 15 of the following year available for tIRA to ROTH conversions.
Investing - The hardest way to make an easy living.

kaneohe
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Re: IRA to Roth Conversion Deadline

Post by kaneohe » Thu Jul 03, 2014 12:03 pm

You can do the Roth conversion whenever you want. Depending on what you are doing, sometimes it is better to do it soon after you make the TIRA contribution.

sscritic
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Re: IRA to Roth Conversion Deadline

Post by sscritic » Thu Jul 03, 2014 12:09 pm

You can do a Roth conversion this year on all the money you contributed to your IRA from 2000 or before to 2013 or even 2014.

You can do a Roth conversion in 2020 of all the money you contributed to your IRA from 2014 to 2020, unless you didn't do any conversion before then, in which case you can convert all the money you contributed to your IRA from 2000 to 2020. Of course, if you just convert your contributions, your IRA will still hold all the earnings. You can convert them as well if you wish.

Note that I said absolutely nothing about taxes. The conversion comes first, the taxes come later. Convert in 2014, report on your 2014 tax return in April or October of 2015. Convert in 2015, file your 2015 return in 2016. Convert in 2020, file your 2020 return in 2021.

Alan S.
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Re: IRA to Roth Conversion Deadline

Post by Alan S. » Thu Jul 03, 2014 12:18 pm

python99 wrote:The question is do IRA to Roth conversion have to be made in calendar year or can you wait until you do your taxes and convert prior to the April 15 deadline similar to a IRA contribution
You cannot wait until 4/15, however you CAN take your TIRA withdrawal in late December, do your taxes in February and determine the additional taxes on a conversion and within 60 days of the distribution roll it to your Roth IRA if you still want the conversion. The conversion will be taxed in the distribution year, but the 5 year holding period for conversions will start in the year the Roth received the rollover.

If you do not want to convert, you must roll it back to the TIRA within 60 days AND you must qualify to do that under the one rollover rule (either the one rollover per IRA account requirement for 2014 or the one rollover for ALL your IRA accounts starting 1/1/2015. If you cannot roll it back because of the one rollover rule, then the work around is to DO the conversion and then recharacterize it back to the TIRA. A recharacterization or conversion does NOT count against the one rollover rule and therefore can be used to get the money back to the TIRA indirectly.

It might be easier to just do the entire conversion in the year distributed and then recharacterize it if that benefits you.

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NAVigator
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Re: IRA to Roth Conversion Deadline

Post by NAVigator » Thu Jul 03, 2014 1:10 pm

I have found this article by Michael Kitces to be useful;
Understanding The Two 5-Year Rules For Roth IRA Contributions And Conversions

Jerry
"I was born with nothing and I have most of it left."

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