Can my spouse and I convert our IRAs to Roth IRAs regardless of earned income?

By Denise Appleby AAA
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. Are part-time employees eligible for fringe benefits?

    Learn how offering fringe benefits allows employers to entice new talent to join their teams, although part-time workers ...
  2. Who is exempt from paying Social Security taxes?

    Learn about the groups of people who qualify for exemption from Social Security taxes, and explore the process of applying ...
  3. How can I avoid paying taxes on my Social Security income?

    Learn how to calculate the percentage of Social Security income benefits that may be taxable, and discover strategies to ...
  4. What is the difference between a fixed and variable annuity?

    Understand the difference between fixed, variable and indexed annuities, and read a brief summary of their respective risks ...
RELATED TERMS
  1. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  2. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  3. Gold IRA

    Definition of Gold IRA
  4. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  5. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  6. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...

You May Also Like

Related Articles
  1. Professionals

    Just Retired? No Better Time for a Second ...

  2. Professionals

    When Your Client's Retirement is Around ...

  3. Professionals

    A New Wake-up Call for Savers

  4. Professionals

    Retirement Bliss? Not So fast: When ...

  5. Professionals

    Multiple Accounts? Here's How to Calculate ...

Trading Center