Roth conversion Question
Hello,
I know that a Roth conversion cannot be counted towards a client’s RMD but if there were tax withholdings on the Roth conversion could the tax withholdings be included towards the RMD amount?
Thank you.
Hello,
I know that a Roth conversion cannot be counted towards a client’s RMD but if there were tax withholdings on the Roth conversion could the tax withholdings be included towards the RMD amount?
Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2025-06-11 11:06
Technically, if an RMD is converted the RMD is still satisfied, but an excess Roth contribution is triggered.
If a client converts their RMD and withholding was included in the transaction, both the conversion and the withholding is applied to the RMD. But the withheld portion will not be an excess contribution.
In either case, the RMD should be completed before doing a conversion. And in most cases, conversions should be completed before RMDs start, with exceptions of course.