Conversions

Employer-Sponsored Plan Conversions to a Roth IRA

Beginning in 2008, conversion rollovers from employer-sponsored plans, such as qualified plans and 403(b) plans, to a Roth IRA are permitted.  

Important Changes to Roth Conversions Effective January 1, 2010

Any taxable income resulting from a conversion will be includable on your federal income tax return for the year of the conversion.  If you have decided that the Roth IRA may be suitable for you, you can convert your Traditional IRA into a Roth IRA.  

Beginning in 2010, there are no eligibility requirements for converting a traditional, SEP or SIMPLE (after the two year holding period) IRA into a Roth IRA under the Tax Increase Prevention and Reconciliation Act of 2006 (“TIPRA”).  For higher wage earners, this is a prime opportunity to convert money into the Roth IRA to allow your money to have tax-free growth at retirement.  You should consult your tax advisor or the Internal Revenue Service (IRS) web site www.irs.gov regarding special taxation rules that will apply to conversions occurring in 2010.

Beginning in 2010, individuals are permitted to rollover amounts from an eligible retirement plan and convert them to a Roth IRA under The Worker, Retiree, and Employer Recovery Act of 2008 (“WRERA”) regardless of their modified adjusted gross income or filing status.