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)

Hot Definitions
  1. Restricted Stock Unit

    Compensation offered by an employer to an employee in the form of company stock. The employee does not receive the stock ...
  2. Operating Ratio

    A ratio that shows the efficiency of a company's management by comparing operating expense to net sales. Calculated as:
  3. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  4. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  5. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center