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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: Taxes, IRA to ROTH conversions..FEIE Date: 8/15/2013 5:48 PM
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My income is foreign earned, so it pretty much all falls under the FEIE. I live overseas all year. I am single. I have no property in USA.

1) I roll my 401K to an IRA and say its value is 30k. I then want to convert my IRA to a ROTH with paying as little of my own money as I can. I believe I can do this over a period of years by using my standard deductions (roughly $5,800 can’t remember the amount) each year. Essentially I use my deductions for the taxes I would have to pay for this conversion. Is this allowed?


Conversion is allowed, but the tax calculation isn't what you think it is. (It used to be, but Congress caught on.) You can see how the tax calculation works on page 40 of the 1040 instructions.

2) Ignoring question 1. As I currently understand it I cannot put money into a ROTH each year because my wages are FEIE and not seen as taxed income. Is this statement true?

Yes.

Is there a way in which I can put any money into a ROTH?

Move back to the States or make enough money that you have taxable compensation after the FEIE.

Phil
Rule Your Retirement Home Fool
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