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<<I went ahead and hastily converted about $12K in a regular IRA to ROTH a month ago. I did this because I was fairly certain my AGI for 1998 would not exceed $100K and the earlier I did so, the lower the amount converted (I hope to have some gains this year using the RP4 method!) and less taxes owed!
Now I find that due to unexpected raises and bonuses, I will certainly exceed even $110K (I know, everyone should have problems like these :-)). Now what happens? Since my Roth conversion is illegal, do I have to convert it back and will there be any penalties? Should I convert it back right away or wait till the EOY figures come in and I HAVE in fact exceeded the amount? Thanks for your help.>>

Not to worry. Once Congress finshes with technical corrections there will be an easy way to convert back, and you can do it without penalty any time up to April 15, 1999. Wait at least as long as it takes for them to finish this legislation, then as long as you want afterward to be really certain that your income will exceed the limit. Suggested reading:

Status of technical corrections:

Correcting excess contributions:

Precise definition of modified adjusted gross income:

Kaye Thomas, author
Fairmark Press Tax Guide for Investors
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