Debra A. Simmons, CPA

2010 Rules for Roth IRAs

In Income Taxes on January 13, 2010 at 2:25 am

Beginning January 1, 2010, the income and filing status requirements for rollovers (including conversions) to a Roth IRA was eliminated. Additionally, for rollovers to a Roth IRA in 2010 only, a special 2-year option for reporting taxable portions of your rollover apply.

Under the new rules, regardless of your income or filing status, you can roll over (convert) the following to a Roth IRA:

*Your traditional individual retirement arrangement (IRA), SEP IRA or SIMPLE IRA;
*an Eligible rollover distribution (ERD)- For example, a 401(k) or a 403(b) plan; or
*an ER from a retirement plan for which you are a beneficiary.

For rollovers and conversions to a Roth IRA in 2010 only, you have the option of reporting the taxable portion of your rollover in your gross income for 2010, or reporting half in 2011 and half in 2012.

Previously, to roll over to a Roth IRA, both of these requirements needed to be met; your modified AGI was less than $100,000 and your filing status was not married filing separate.

For additional information on the effect of the 2010 changes on your retirement accounts, please contact me at (310) 701-1825.

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