Taxes Roth Conversion 2010
If I convert my traditional IRA to a Roth in 2010 and the Bush tax cuts end 12/31/2010, will I owe my 2010 tax rate in 2011 and 2012, if taxes are increased when Bush tax cuts expire? Should I pay the entire 2010 conversion in 2011 based upon 2010 tax rates?
Permalink Submitted by Alan Spross on Sat, 2008-05-31 03:00
Good thinking.
If you take the automatic 2 year deferral, the conversion will be taxed at whatever your marginal rates are in 2011 and 2012 after the Bush cuts sunset. However, you will also be able to opt out of the deferral, most likely up to the extended due date for the 2010 return. This provides a last minute opportunity to assess your marginal rate for 2010 vrs a pretty good idea of what 2011 will be. 2012 may still be a crap shoot at that point.