convert SEP IRA to a Roth ??
Suppose a sole proprietor with no employees contributes to a SEP-IRA in a high income year.
In a following low income year, can she convert the SEP IRA to a Roth IRA?
Does she have to terminate the SEP-IRA and move funds to a traditional IRA account first?
Can she retain the SEP-IRA and just convert some of the funds to a Roth IRA?
Thank you for comments and assistance.
Permalink Submitted by Alan - IRA critic on Mon, 2017-12-11 22:16
Yes, either a full or partial conversion can be done directly to a Roth IRA. The SEP IRA account does not have to be terminated. However, before converting the taxpayer should be sure that the SEP contribution does not exceed the allowed contribution since recharacterizations of conversions may not be allowed in the future.