Is it to late to do a non deduct IRA ROTH Conversion?
I have a client who already filed and wants to do a non deductible IRA to ROTH conversion. Is it to late? Would they have to redo their taxes? This is their accountant’s response.
This is not something I would do if I had already filed my 2014 tax return. Properly reporting and documenting the basis you have in your IRA’s is important so you don’t end up paying tax on the money you put in and tax on the same money when it comes out. There was just a court case where the basis in an individual’s IRA was not properly recorded and the court would not accept his word for how much basis he had in his IRA resulting in the in the distribution from the IRA being taxed. This is not to say it can’t be done.
Permalink Submitted by Jose Morales on Thu, 2015-04-09 16:08
It’s not too late, if they are willing to amend their tax return. It sounds like hte accountant will most likely charge a pretty penny for this service.
Permalink Submitted by David Mertz on Thu, 2015-04-09 16:22
Of course the amendment to the 2014 tax return would only be to add the nondeductible traditional IRA contribution (made by April 15, 2015) on Form 8606. The Roth conversion performed in 2015 would be reportable on the client’s 2015 tax return.