ROTH CONVERSION
If an individual is contributing to a SEP (still working) and wants to contribute to a Roth, yet makes over the threhold for Roth contributions, can he/she contribute to an IRA and then immediatlely convert to a Roth without taxes due?
In other words, since he/she is still working and contributing to the SEP, is the pretax contribution to the SEP excluded from the calculation?
Permalink Submitted by Anonymous (not verified) on Tue, 2010-10-05 22:26
Interesting question.
Since tax form 8606 will use the 12/31 balance you could avoid that year’s contribution, since you can contribute for 2010 up until the business’ tax filing deadline. Prior SEP monies will be in the “pool”.
http://www.irs.gov/pub/irs-pdf/f8606.pdf
line 6
pko