2 year spread on 2010 Roth conversion
Is the 2 year income spread on the 2010 Roth conversion mandatory or optional? That is, if the taxpayer thinks rates are going way up in 2011 and 2012 can he go ahead and pay the tax in 2010?
Is the 2 year income spread on the 2010 Roth conversion mandatory or optional? That is, if the taxpayer thinks rates are going way up in 2011 and 2012 can he go ahead and pay the tax in 2010?
Permalink Submitted by Alan Spross on Mon, 2009-09-14 18:44
Yes, there is a choice. The default rule is reporting 50% in 2011 and 2012. But you can OPT OUT of the default rule and elect to report all your conversions in 2010 income. The deadline for this decision is the extended due date of 10/17/2011. By then your 2011 rates will be known, and you might have a good idea where 2012 will be.
You must make the same choice for all your own conversions in 2010. But if you are married, a spouse can make a different choice than you do.