Roth 2009 income rules
I was wondering if the conversion amount should be taken into account when doing the Roth conversion for 2009. Let’s say someone has 94k adjusted gross then wanted to convert 8000 from a Traditional to a Roth. Would that be allowed since his income was below the limit or since the 8000 gets added he’d be over the limit and not allowed to do the conversion. I can’t seem to find the answer. I do know the income limits go away in 2010 so if not this year, he can do it next year.
Permalink Submitted by Clyde Wolf on Wed, 2009-07-15 16:13
Jcooprider,
It is not AGI that matters, but MAGI (Modified Adjusted Gross Income) that can not exceed the $100,000 for 2009 conversions to ROTH IRAs. That limit will disappear on January 1, 2010.
MAGI subtracts the conversion amount from AGI .
MAGI adds to AGI most adjustments to income that were subtracted from Gross Income to arrive at the taxpayer’s AGI. See IRS PUB 590, Individual Retirement Arrangements, page 61.