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IRAs: Frequently Asked Questions

Can I Convert A Traditional IRA To A Roth IRA?

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Only if your adjusted gross income is less than $100,000, exclusive of forced withdrawals from a traditional IRA (required after age 70 ½).

Starting 2010, the answer will also be “Yes” even if you are making more than $100,000.

You pay the income tax on the conversion. If you convert in 2010, you will be able to spread the tax over 2011 and 2012.

Keep in mind that the amount you convert must be reported as income and that it is taxed in your top bracket. You may still want to do this as an estate planning tool because inherited Roth accounts are tax-free (unlike traditional IRAs).

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