A:

You may be eligible to convert your Traditional IRA to a Roth IRA regardless of whether you have earned income. However, if your modified adjusted gross income (AGI) exceeds $100,000, you are not eligible for a Roth conversion. If you meet the following conditions, you are eligible to convert your assets to a Roth IRA:

1. Your modified AGI is not more than $100,000.
2. You are not a married individual filing a separate return.

For Roth IRA purposes, your AGI as shown on your return is modified as follows:

1. Subtract any income resulting from the conversion of your IRA to your Roth IRA (conversion income).

2. Add the following deductions and exclusions:

  1. Traditional IRA deduction
  2. Student loan interest deduction
  3. Tuition and fees deduction
  4. Foreign-earned income exclusion
  5. Foreign housing exclusion or deduction
  6. Exclusion of qualified bond interest shown on Form 8815
  7. Exclusion of employer-paid adoption expenses shown on Form 8839

To determine your AGI, please refer to IRS Form 1040.

To learn more, read Did Your Roth IRA Conversion Pass Or Fail?

This question was answered by Denise Appleby
(
Contact Denise)

RELATED FAQS
  1. Is there a limit on how much I can move from my IRA to my Roth IRA?

    There is no limit on the amount that can be converted from your Traditional IRA to your Roth IRA. As you may already know, ... Read Answer >>
  2. Does it make sense to convert a Traditional IRA to a Roth when the market’s down?

    If your modified adjusted gross income (MAGI) is $100,000 or less and you are not married filing separately, you may initiate ... Read Answer >>
  3. I am 59 (not 59.5) and my husband is 65. We have participated in a SIMPLE IRA with ...

    During the first two years after a SIMPLE IRA is established, assets held in the SIMPLE IRA must not be transferred or rolled ... Read Answer >>
  4. Earnings within a Roth IRA are tax free, so are these earnings included in the modified ...

    There are two possible answers to this question, depending on whether or not the distribution from the Roth IRA is qualified.Earnings ... Read Answer >>
  5. When you have opened up a backdoor Roth IRA can you make regular monthly contributions ...

  6. Can I still contribute to my Roth IRA if my spouse earns over the requirement cap?

    My spouse makes over the amount allowed to contribute to a Roth IRA. However, I do not. Is it possible... Read Answer >>
Related Articles
  1. Retirement

    5 Reasons to Convert a Roth To a Traditional IRA

    Here's a quintet of cases when the traditional IRA trumps the Roth version.
  2. Retirement

    How a Roth IRA Works After Retirement

    What retirees need to know about taxes, distributions and passing on your unspent savings to the next generation.
  3. Retirement

    Don't Make These Top 10 Mistakes On Your Roth IRA

    Don't lose out on the benefits of a Roth by contributing too much, breaking rollover rules or making other avoidable errors.
  4. Financial Advisors

    Why Some Advisors are Shy to Convert Roth IRAs

    Potential upcoming changes from the Obama Administration could hit rollovers from traditional to Roth IRAs, and that has advisors reluctant to convert.
  5. Personal Finance

    Assessing the Value of the Roth IRA Conversion

    Learn how the interplay among an intricate web of factors in a Roth IRA determines the strategy’s potential value.
  6. Retirement

    Roth 401(k) Vs. Roth IRA: Which One Is Better?

    It all depends on your age, your income - and your plans for your retirement nest egg.
  7. Taxes

    Roth IRA Vs. Traditional IRA

    Learn more about the differences between a Roth IRA and traditional IRA.
  8. Retirement

    Roth IRA Contribution Limits in 2016

    Discover the benefits of Roth IRA accounts and how much you can contribute for your retirement. Learn which IRA plan is best for you.
  9. Retirement

    Funding Your IRA vs. Your Roth IRA, Which First?

    The answer depends on where you are in your career and personal life each year. Here are some scenarios and rules to think about.
  10. Retirement

    6 Reasons Not to Recharacterize Your Roth IRA

    If you're thinking of recharacterizing your Roth IRA into a traditional IRA account, here are six compelling reasons why you should reconsider.
RELATED TERMS
  1. Roth IRA

    An individual retirement plan that bears many similarities to ...
  2. Roth IRA Conversion

    A reportable movement of assets from a Traditional, SEP or SIMPLE ...
  3. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
  4. Ordering Rules

    The order in which Roth IRA assets are distributed. Assets are ...
  5. Individual Retirement Account - IRA

    An investing tool used by individuals to earn and earmark funds ...
  6. Qualified Distribution

    Distributions made from a Roth IRA that are tax and penalty free. ...
Trading Center