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Subject:  Re: IRA to ROTH IRA Conversions Date:  6/10/2019  11:18 AM
Author:  aj485 Number:  129367 of 131788

1) Is there a deadline that I must decide and perform this conversion to have it qualify for the tax year 2019 ?

The conversion must be completed by Dec 31, 2019. Given delays that can occur due to holidays and high activity at the end of the year, I would suggest starting no later than Dec 20, if the 2 accounts are at the same brokerage. You will need to allow more time if the accounts are at different brokerages.

2) Do I have to convert every single IRA account to the ROTH or can I pick and choose which IRA accounts or make a partial conversion? (I have been getting conflicting information on this one)

You can do partial conversions. But if your intent is to be able to do the 'back door Roth' process because in the future you will make too much to qualify for regular Roth conversions, it's best if all of your Traditional IRAs have a $0 balance - either by moving them to an employer's 401(k) or by converting them to a Roth.

3) How do I figure out the taxes I would owe on the conversion? Is there a process or method that I must follow so that I am paying the correct taxes? Has anyone done this calculation themselves or is everyone using a CPA or some other professional?

You will get a form 1099-R from your brokerage. You will use that to fill out a form 8606. This can easily be done using tax software of your choice. For a rough estimate, you can just figure the taxes on the amount converted by using what you think your marginal tax bracket will be, multiplied by the amount converted.

4) Are the taxes paid immediately after the conversion or due with your tax return filed for that year it applies to?

They are due with the tax return for the year you did the conversion. That said - you will need to be sure you make appropriate estimated tax payments, or have enough withheld from paychecks, so that you will either pay the taxes owed, or meet a safe harbor, so you can avoid underpayment penalties. Note: If you have taxes withheld from the Traditional IRA and are under 59 1/2, you will owe a penalty on the withheld amount. So it's really best to do these conversions only if you have the money from outside the Traditional IRA to pay the taxes.

5) Finally, How long of a process does this generally take so I can time it right if there is a deadline to observe?

It depends on your brokerage, although I suggested a timeline above.

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