making non-deductible IRA contributions
I converted my entire IRA to a Roth in March. Afterwards, I made a non-deductible IRA contribution to my regular IRA account (I don’t qualify for Roth contributions) before April 15, 2010. Can I now convert the $5k in the IRA to the Roth? Will I owe any tax on the conversion?
Thanks.
Permalink Submitted by Alan Spross on Wed, 2010-05-05 23:35
Yes, you can do another conversion of the recent non deductible contribution. You will need to file an 8606 for the year the contribution applies to (09 or 10).
The taxable amount of both your conversions will be consolidated into one weighted factor that includes the affect of the recent non deductible contribution. But since you will have converted your entire TIRA balance, there will be no additional tax bill beyond what you would have paid for the March conversion only.
Permalink Submitted by Anonymous (not verified) on Thu, 2010-05-06 02:25
Technically, if you convert “everything” again (5K + appreciation in an upward trending market) you will be taxed on those earnings.
pko