Converting traditional IRA to Roth

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johnanglemen
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Converting traditional IRA to Roth

Post by johnanglemen » Mon Dec 21, 2009 4:08 pm

I'd like to take advantage of the 2010 Roth loophole by setting up a traditional IRA at Wells Fargo and then converting it to a Roth.

Is the correct procedure to open a Traditional IRA with Wells Fargo now (in 2009), and then, on January 1, Wells Fargo will offer some means of conversion?

Also, if I'm unable to get the account opened by Dec 31, will I still be able to make a 2009 contribution?

Thanks.

DSInvestor
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Post by DSInvestor » Mon Dec 21, 2009 4:14 pm

http://www.irs.gov/publications/p590/ch ... nk10006106
Contributions must be made by due date. Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. For most people, this means that contributions for 2008 must be made by April 15, 2009, and contributions for 2009 must be made by April 15, 2010.
bold = my emphasis.

2010 IRA contributions can be made in from JAN 01, 2010 through APR 15, 2011 not including extensions. If you wish, you could make your 2009 and 2010 contributions in early 2010 and then convert all to Roth in 2010.

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Taylor Larimore
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Re: Converting traditional IRA to Roth

Post by Taylor Larimore » Mon Dec 21, 2009 4:20 pm

johnanglemen wrote:I'd like to take advantage of the 2010 Roth loophole by setting up a traditional IRA at Wells Fargo and then converting it to a Roth.

Is the correct procedure to open a Traditional IRA with Wells Fargo now (in 2009), and then, on January 1, Wells Fargo will offer some means of conversion?

Also, if I'm unable to get the account opened by Dec 31, will I still be able to make a 2009 contribution?

Thanks.
Hi John:

You should be able to convert directly into a Roth at Wells Fargo. You can make your 2009 contribution anytime before April 15, 2010.

You should confirm this with Wells Fargo.
"Simplicity is the master key to financial success." -- Jack Bogle

Default User BR
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Re: Converting traditional IRA to Roth

Post by Default User BR » Mon Dec 21, 2009 4:51 pm

johnanglemen wrote:Is the correct procedure to open a Traditional IRA with Wells Fargo now (in 2009), and then, on January 1, Wells Fargo will offer some means of conversion?
You will also need to open a Roth at Wells Fargo prior to the conversion. Then you'll get an IRA Distribution Request Form from their online documents. When you fill that out, under Section IV there will be an option for Traditional IRA to Roth conversion. You'll plug in the account number of the Roth.

The form can be faxed in or mailed, but not done online. Setting up the accounts can be done over the phone, but I think they need a signature on the form for the actual conversion. You can check with Wellstrade support.




Brian

johnanglemen
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Re: Converting traditional IRA to Roth

Post by johnanglemen » Tue Dec 22, 2009 5:18 am

Default User BR wrote:
johnanglemen wrote:Is the correct procedure to open a Traditional IRA with Wells Fargo now (in 2009), and then, on January 1, Wells Fargo will offer some means of conversion?
You will also need to open a Roth at Wells Fargo prior to the conversion. Then you'll get an IRA Distribution Request Form from their online documents. When you fill that out, under Section IV there will be an option for Traditional IRA to Roth conversion. You'll plug in the account number of the Roth.

The form can be faxed in or mailed, but not done online. Setting up the accounts can be done over the phone, but I think they need a signature on the form for the actual conversion. You can check with Wellstrade support.
When you try to open a Roth at WF, it says that the minimum initial funding is $1000. But isn't it illegal for high-income tax payers to fund a Roth directly?

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Taylor Larimore
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Roth funding

Post by Taylor Larimore » Tue Dec 22, 2009 8:30 am

Hi John:
When you try to open a Roth at WF, it says that the minimum initial funding is $1000. But isn't it illegal for high-income tax payers to fund a Roth directly?
In 2010, high income taxpayers (adjusted gross income (AGI) above $169,000) ARE allowed to contribute to a Roth IRA.
"Simplicity is the master key to financial success." -- Jack Bogle

Default User BR
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Joined: Mon Dec 17, 2007 7:32 pm

Re: Converting traditional IRA to Roth

Post by Default User BR » Tue Dec 22, 2009 12:08 pm

johnanglemen wrote:When you try to open a Roth at WF, it says that the minimum initial funding is $1000. But isn't it illegal for high-income tax payers to fund a Roth directly?
Funding doesn't have to be done immediately, as I recall. You can call the IRA number and talk to them. They're the ones that deal with setting up new accounts. Let them know what you want to do, and they'll guide you.



Brian

pshonore
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Re: Roth funding

Post by pshonore » Tue Dec 22, 2009 2:28 pm

Taylor Larimore wrote:Hi John:
When you try to open a Roth at WF, it says that the minimum initial funding is $1000. But isn't it illegal for high-income tax payers to fund a Roth directly?
In 2010, high income taxpayers (adjusted gross income (AGI) above $169,000) ARE allowed to contribute to a Roth IRA.
High income taxpayers (above $177,000 MAGI - MFJ) are not allowed to contribute to a Roth; however, they can convert to a Roth

ruud
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Re: Roth funding

Post by ruud » Tue Dec 22, 2009 2:31 pm

Taylor Larimore wrote:In 2010, high income taxpayers (adjusted gross income (AGI) above $169,000) ARE allowed to contribute to a Roth IRA.
are you sure about this?
"A good plan, violently executed now, is better than a perfect plan next week."

DSInvestor
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Post by DSInvestor » Tue Dec 22, 2009 2:36 pm

Here's an IRS link showing 2009 MAGI limits for ROTH-IRA contributions:
http://www.irs.gov/publications/p590/ch ... nk10006480
Modified AGI limits for Roth IRA contributions increased. For 2009, your Roth IRA contribution limit is reduced (phased out) in the following situations.

* Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $166,000. You cannot make a Roth IRA contribution if your modified AGI is $176,000 or more.

* Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2009 and your modified AGI is at least $105,000. You cannot make a Roth IRA contribution if your modified AGI is $120,000 or more.

* Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more.
For 2010, Roth contribution phase out begins at MAGI 105K single and 167K married filing jointly.
See http://www.fairmark.com/refrence/index.htm

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