Nondeductible conversion to Roth

What are the income limits, if any, in 2012 for making a contribution to a nondeductible TIRA and than almost immediately converting that to a Roth? Thank you. Douglas



Douglas,
There are no upper income limits to make a non deductible TIRA contribution. The only requirements are:
1) There must be earned income at least equal to the contribution
2) Taxpayer cannot reach age 70.5 by the end of 2012.

Once that contribution is made, it can be converted to a Roth IRA. However, if the person has other TIRA, SEP IRA or SIMPLE IRA balances, the conversion to a Roth IRA will be mostly taxable. If this non deductible contribution is the ONLY TIRA value, it can be converted tax free to a Roth IRA.



What is a TIRA?



Traditional IRA.



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