Non Deductible IRA to Roth IRA rollover?

[BuckyBadger]

Is the incomce limit on rolling a non deductible IRA into a Roth still lifted? Or has it been re-implemented?

We usually contribute to a Roth but no longer can. I'm not sure if a non deductible is worht it, but if I can put it into a non deductible and then roll it into a Roth right away then it's a no-brainer.

I'll have to open up a new Roth? Or can I roll it into an already existing account?

Thanks!

[MonkeyMama]

The income limit is still lifted, yes.

You can roll it over into an existing ROTH - does not have to be a new account. That said, I would keep impeccable records, forever, so you know the nature of your ROTH account. How much was converted, and how much of the balance were direct ROTH contributions. The rest, presumably, is earnings. Since these different *buckets* have different treatments, it is good to keep track of. The different treatments may never apply to you, but if they do, you will be glad to have the records. Opening separate ROTHs might add a level of simplicity to said records.

The big caveat with this strategy is to make sure you don't have other traditional IRAs. Other IRAs add tax complexity. Just checking...

[mcfroggin]

Sure, convert away.

[DKAS]

The income limit is still lifted, yes.

You can roll it over into an existing ROTH - does not have to be a new account. That said, I would keep impeccable records, forever, so you know the nature of your ROTH account. How much was converted, and how much of the balance were direct ROTH contributions. The rest, presumably, is earnings. Since these different *buckets* have different treatments, it is good to keep track of. The different treatments may never apply to you, but if they do, you will be glad to have the records. Opening separate ROTHs might add a level of simplicity to said records.

The big caveat with this strategy is to make sure you don't have other traditional IRAs. Other IRAs add tax complexity. Just checking...

I'm in a similar dillema, have about $3000 in Non Deductible IRA. If I convert it to a new Roth IRA, there should not be any tax consequences right? since both are after tax!

[BuckyBadger]

I'm in a similar dillema, have about $3000 in Non Deductible IRA. If I convert it to a new Roth IRA, there should not be any tax consequences right? since both are after tax!

I believe that you would have to pay tax on the interest that your original contribution has earned.

[Petunia 100]

There might be some tax consequences. If you have traditional IRA contributions that you have deducted, you do not get to convert only the non-deductible contribtutions.

So, have you deducted any traditional IRA contributions?

[DKAS]

There might be some tax consequences. If you have traditional IRA contributions that you have deducted, you do not get to convert only the non-deductible contribtutions.

So, have you deducted any traditional IRA contributions?

Nope, did not do that. I believe Bucky is correct, I'll have to pay tax on earnings of original contributions.

[Petunia 100]

Then definately convert, the tax hit will be minimal.