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Hello fellow fools,

I just need some quick advice. I opened a Tradtional IRA last year because I needed a $2000 tax write off for 1999. I eventually would like to convert it into a Roth. When and how is the best way for me to do this and is it allowable/advantageos for me to keep one of each?

Please help,

Jeff
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It certainly is allowable, and in theory it isn't advantangeous to have one of each(At least I don't think so). The main reason is that the differences between a Traditional and a Roth are enough that for most people one should be better than the other(Of course this goes without saying that tax laws changing may also effect this down the line).

I'd make sure that the Roth is the way to go and then set aside enough money to cover the conversion since the tax bill while probably small shouldn't come from the money you are converting.

Just my advice,

JB
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<< I opened a Tradtional IRA last year because I needed a $2000 tax write off for 1999. I eventually would like to convert it into a Roth. When and how is the best way for me to do this >>

If you're going to do it, do it as soon as you can pay the tax due from the conversion income with non-IRA funds. The law allows you to convert in any year for which your AGI is less than $100,000 and you don't file Married, Filing Separately. The sooner you convert, the sooner the further earnings become tax-free.

<< and is it allowable/advantageos for me to keep one of each? >>

Allowable yes. Advantageous depends on you. There are a number of articles about IRAs that you might want to check out in the FAQ of the Tax Strategies board.

TMF ExRO
Phil Marti
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