Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I plugged in our tax info into TaxCut and am facing a warning (and higher taxes than initially anticipated) related to a Rollover to Roth conversion this year, where 403b assets from my wife's previous employer were moved into a Rollover IRA and I estimated we'd be safe in moving these same Rollover assets into her Roth IRA account (through Firstrade). Upon doing a "Final Check" for our federal return, it states "It appears that your spouse may have made an erroneous conversion because your MAGI exceeds $100K. ..... If our MAGI >$100K, this is an erroneous conversion and your spouse must recharacterize it."

I've a few questions from this, as I contend the $100K statement:
1) What constitutes MAGI? I found "Adjusted gross income ("AGI") represents your total income reduced by certain deductions known as "adjustments," but before you take your itemized deduction or standard deduction, and before you take the deduction for personal exemptions."

So would this mean our collective income from Box #2 from our W-2s? Would this not include the IRA distributions (of $8.5K)?
2) If it turns out our MAGI does exceed that limit, then in performing the recharacterization of a certain portion of that $8.5K to get us beneath the $100K limit, would we be subject to any fees or penalties?


Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.