taxation on roth conversion
if I do a conversion in 2009 how many years do I have to pay the taxes. is it 2 years or longer? is taxtion on conversion waived in 2010?
if I do a conversion in 2009 how many years do I have to pay the taxes. is it 2 years or longer? is taxtion on conversion waived in 2010?
Permalink Submitted by Clyde Wolf on Mon, 2009-04-06 23:45
Snaghshineh,
IRA owners making a 2009 conversion will be required to pay the income tax due on that conversion on their 2009 tax return.
Taxes on conversions in 2010, the tax payer has a choice of paying the tax on their 2010 tax retrun or splitting the tax over a 2 year period, 2010 and 2011 tax returns. This 2 year tax payment is only good for 2010 conversions.
At this time taxes on any conversion has not been waived.
Permalink Submitted by Alan Spross on Tue, 2009-04-07 00:52
Amend the cwolf response to show that for 2010 conversions, taxes may be paid half in 2011 and half in 2012, instead of 2010 and 2011. The other option would be to opt out of the deferral and report the entire conversion on the 2010 return.
Permalink Submitted by Clyde Wolf on Tue, 2009-04-07 15:55
Alan-oniras,
Thanks for your back-up and corrections.
I guess I was too wrapped up in paying 2008 taxes now during 2009.