Roth Conversion Income Limits After 2010
Does the elimination of the Roth conversion $100,000 MAGI income limit apply only for 2010 or, as stated various publications, “for all tax years beginning after December 31, 2009”? There seems to be some disagreement regarding this in the personal financial advisory business as seen on posts in various web sites. I also called the IRS and was not able to reach anyone who had a clue.
My first post, so I apoligize if this has been asked/answered before.
Permalink Submitted by Alan Spross on Sat, 2008-08-16 22:39
The income limit (as well as the joint filing requirement for married taxpayers who convert) disappears for all years after 2009, not just for 2010. What is different about 2010 only is that the taxpayer will be able to defer half the conversion income to 2011 and the other half to 2012. This would help prevent larger conversions from increasing the marginal tax bracket in the year of the conversion.
The taxpayer can also opt out of the deferral and report the entire conversion in 2010 if desired.
Permalink Submitted by Harry Maier on Sat, 2008-08-16 23:45
Thanks so much for your quick answer. My accountant is the skeptical type, so can you direct me to some reg or publication which says this?I’ve seen testimony from the Treasury Department Chief Benefits Counsel in late June, 2008 to Congress and a “Blue Book” report from a Joint Committee of the House Ways and Means Committee and Senate Finance Committee citing the “years ending after December 31, 2009”, but nothing from the IRS or Treasury Department. My accountant believes the income limitation elimination is only for 2010. I’m a little surprised that nothing I’ve seen, at least, really seems to concentrate on this–has some real impact for some of us boomers.
Again, thanks for your quick response.
Permalink Submitted by Alan Spross on Sun, 2008-08-17 03:12
Following is a link to Sec 512 of TIPRA, the 2005 legislation signed into law as HR 4297. Note the end of Sec 512:
http://thomas.loc.gov/cgi-bin/query/F?c109:6:./temp/~c109bxD5Pv:e64272: