roth conversion tax offset by medical expenses?
I WOULD LIKE TO CONVERT A TRADITIONAL IRA TO A ROTH. DUE TO HIGH MEDICAL EXPENSES, LOWER INCOME, AND THE REDUCED ACCOUNT VALUES THIS YEAR, WOULD IT BE A GOOD TIME TO CONVERT UP TO THE AMOUNT OF THE LOSS CREATED BY MY HIGH RIGHT OFF NOT BEING UTILIZED DUE TO THE LOWER INCOME? ALSO, CAN I STILL DO THIS FOR 08, OR GET AN IRS EXCEPTION DUE TO THE MEDICAL AND OTHER CIRCUMSTANCES?
THANK YOU..
Permalink Submitted by Alan Spross on Wed, 2009-01-07 23:03
Generally, converting tax free to fully apply your itemized deductions is an excellent idea. Unfortuneately, you cannot convert for 2008 after year end unless you took the traditional IRA distribution out prior to year end. I do not know which year you paid or will pay for all the expenses or which year your income will be lower.
The year you actually paid the medical expenses determines the year you should convert, but if you paid them all last year but did not take an IRA distribution, you cannot utilize those medical deductions.
Permalink Submitted by Cecilia Ramirez on Wed, 2009-01-07 23:31
In regards to my husband’s age, he was 62 1/2 yrs. of age when he passed away. I turned 60 in July, 2008.