Comments on: Roth IRA Conversion Could Trigger Tax Underpayment Penalty http://www.myretirementblog.com/roth-ira-conversion-could-trigger-tax-underpayment-penalty.html Retire happy, healthy and wise. Tue, 07 Feb 2012 11:13:49 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Britt (Your Roth IRA) http://www.myretirementblog.com/roth-ira-conversion-could-trigger-tax-underpayment-penalty.html/comment-page-1#comment-68181 Britt (Your Roth IRA) Wed, 10 Jun 2009 13:47:02 +0000 http://www.myretirementblog.com/?p=246#comment-68181 This is a good point to remember. Since contributions to your Traditional IRA were most likely tax deductible when made, the IRS views a conversion to the non-tax deductible Roth IRA as income. Make sure you pay the applicable income taxes. Also, make sure you adhere the Roth IRA 5 year holding period before attempting to make any qualified distributions. Even if you're over age 59.5, the IRS views the conversion date as identical to the Roth IRA creation date, so you still need to wait 5 tax years before making qualified distributions. This is a good point to remember. Since contributions to your Traditional IRA were most likely tax deductible when made, the IRS views a conversion to the non-tax deductible Roth IRA as income. Make sure you pay the applicable income taxes.

Also, make sure you adhere the Roth IRA 5 year holding period before attempting to make any qualified distributions. Even if you’re over age 59.5, the IRS views the conversion date as identical to the Roth IRA creation date, so you still need to wait 5 tax years before making qualified distributions.

]]> By: Tax Carnival #41: TaxtoberFest 2008 | My Journey to Millions http://www.myretirementblog.com/roth-ira-conversion-could-trigger-tax-underpayment-penalty.html/comment-page-1#comment-68180 Tax Carnival #41: TaxtoberFest 2008 | My Journey to Millions Tue, 07 Oct 2008 01:20:51 +0000 http://www.myretirementblog.com/?p=246#comment-68180 [...] Sox First briefly describes Nicholas Cages fight against the IRS here.  [...] [...] Sox First briefly describes Nicholas Cages fight against the IRS here.  [...]

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