In our last two blog posts, we compared Traditional IRA and Roth IRA contribution limitations. Now we will discuss conversion from Traditional IRA to Roth IRA.
First, the good news - there is NO income limitation on conversion from traditional IRA to Roth IRA!
Now, the bad news - starting this year, the IRS has adopted a stricter limitation on how many tax-free IRA rollovers can be done in any one-year (365-day) period. However, if you do a direct trustee-to-trustee transfers (meaning the money won't pass through your hands) between IRAs or rollovers from qualified retirement plans (such as 401(k) plans) into IRAs, such limitation does not apply, and of course such transactions will be tax-free to you.
First, the good news - there is NO income limitation on conversion from traditional IRA to Roth IRA!
Now, the bad news - starting this year, the IRS has adopted a stricter limitation on how many tax-free IRA rollovers can be done in any one-year (365-day) period. However, if you do a direct trustee-to-trustee transfers (meaning the money won't pass through your hands) between IRAs or rollovers from qualified retirement plans (such as 401(k) plans) into IRAs, such limitation does not apply, and of course such transactions will be tax-free to you.
RSS Feed
