Roth Conversion
On a 2010 conversion is it the tax that is spread over 2 years; or, is it the income? I cannot find this information at IRS site. I keep seeing media posts that its the tax that is spread . Please help!
On a 2010 conversion is it the tax that is spread over 2 years; or, is it the income? I cannot find this information at IRS site. I keep seeing media posts that its the tax that is spread . Please help!
Permalink Submitted by Al Fry on Tue, 2009-11-17 20:38
The full taxable conversion amount (and thus the taxes) can be spread over years 2011 and 2012.
Permalink Submitted by Alan Spross on Thu, 2009-11-19 04:03
Another way of putting it is that the income is deferred, and taxes will be due on the income at the rates that apply in the year the income is reported. There is a good chance for tax rate increases in 2011 and 2012, but the recharacterization deadline is late in 2011, so the taxpayer would have a good idea as to 2011 tax liability by that time.
A taxpayer can also opt out of the two year deferral and report the conversion totally in 2010 if this appears to be to their benefit. If married, one spouse can defer and the other opt out and report their conversion in 2010.