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Asked this in the Tax strategies board but got no answer

so heres the situation: I have 4000 dollars to invest to start IRAs for my wife and I. In 1999 we liquidated my wifes 401K (Not the most Foolish move but my wife left the company five years ago and the mutual funds in the 401k were AWFUL and it allowed us to pay off all of our debt) Originally I was going to open a Roth IRA for each of us (I participate in a 401k so I have no choice)

My question: Because the liquidation of my 401K raised my AGI and the 10% penalty my taxes are a little high this year (about $1000 owed) should I make my wifes IRA a traditional take the tax break then roll it over to a Roth IRA next year? This would move the taxes due to next year which is fine with me and my AGI next year will be under 100,000

Does this make sense?

From fool to Fool
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