The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: RothConversion Income Limit||Date: 4/27/1999 12:35 AM|
|Author: TMFTaxes||Number: 15093 of 121585|
[[Can someone verify for me the maximum that a joint couple's income can be in
order to convert an IRA Rollover to a Roth IRA Rollover. My understanding is
$100,000 AGI is the limit for conversion, while $150,000 is the limit for a
$2,000 annual Roth IRA. Is this correct?]]
Basically correct. You can read more about the Roth IRA and the various limits in my series of posts on the Roth IRA in the Taxes FAQ area.
[[ Second, if I contribute 5% to my company's 401k plan, can I still contribute
$2,000 to a Roth IRA, assuming my income is > $2K, but < $150K?]]
Again, yes. Simply participating in your 401k plan will not exclude you from making a Roth contribution. This is also explained in my Roth IRA posts in the Taxes FAQ area.
[[ Lastly, if my Rollover is $50,000 and my joint adjusted gross income is $90K -
$100K, what should I expect the Federal & State tax liability to be? Do I
literally, multiple the rollover amount times 28% if that is my bracket?]]
Yup...that's basically it. Since your conversion will be a 1999 conversion, it'll all be recognized in the year of the conversion, and will all be taxed as ordinary income.
Again, read more about all of these Roth issue in my post in the Taxes FAQ area.
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