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My husband and I opened an account with an investment company last year. A friend advised us to transfer our traditional IRAs to the investement company and put it in a Roth IRA. We are not very savy on investment and were not aware until we asked for help to do our taxes that when we transfered the money we did not "roll over" but converted the $25K. This put us in a much higher income bracket, we had sold our home in 1999 and have no deductions (children at home, college, etc.). We contacted the investment company to see if we could withdraw money from our Tax Free Money Market account or "recharacterize" the IRAs. They told us to get professional tax counseling to see if the investment company could undo what is was done back in May 2000 and roll the IRAs to Traditional vice Roth. Can we do this and reduce our total income by the $25K? If we cannot do this we will owe the IRS about $12K. My husband in 56 yrs. old and I am 53 yrs. old and were advised by the person assisting us with the tax preparation (not a professional CPA or tax counselor) that because of our age we were probably better off leaving the IRAs as traditional. I forgot to mention that we live overseas, working for the federal government in Guantanamo Bay, Cuba and there is no Professional Tax Preparation services. Can someone help us?
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