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Subject:  Re: Trad to Roth IRA for this yr? Date:  6/17/2000  5:23 PM
Author:  TMFPixy Number:  22689 of 88775

Greetings, Jobobb, and welcome. You wrote:

<<Oh, whadda maroon!

All this time I thought our income bracket was too high to allow us to contribute to Roth IRAs, but, come to find out, it's only too high to _convert_ our current IRAs to Roths.

The details: since 1997 mine & husbands's AGI, filing jointly, has been over 100k but less than 150k.
Since 1992 we have each been making non-deductible IRA contributions into our accounts, each of which is kept in a single IRA account with Vanguard.

I'm assuming (since our AGI is too high for conversions) there is nothing we can do about our 1998 and 1999 contributions, which, at the time we contributed, _would_ have been eligible for Roth IRAs, but instead were placed in our traditional non-deductible IRAs ... or is there?

And what we can do about our current tax year contributions? So far, for tax year 2000, we have contributed $1500 each into our traditional non-deductible IRAs. Now that I've realized we can open and contribute to Roth IRA's (our AGI will not exceed $150k this year), would it be possible to transfer that $1500 each (plus whatever it's earned so far in the mutual fund?) to Roth IRAs, or will we only be able to put our remaining $500 allowable contributions into Roths (ie, will transferring the $1500 we already contributed be considered a "conversion" although the contribution was made in the current tax year?)>>

Well, you're too late to correct your 1998 contributions, but you have plenty of time to recharacterize both your 1999 and 2000 contributions. For details see the discussion beginning on page 41 of IRS Publication 590 (Individual Retirement Arrangements) available at You have until the due date of your income tax return (including extensions) for the year of a contribution to recharacterize that contribution (i.e., change a contribution to traditional IRA as one made to a Roth IRA or vice versa). Therefore, you have until October 15, 2000 to change the 1999 contributions and until October 15, 2001 to change the 2000 contributions as ones made to a Roth instead of a traditional. Read the reference and check with your IRA provider to learn how to do so.

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