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. 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 ...
  2. Can I roll a Traditional IRA into a 529 college account for my grandchild?

    A 529 plan, also known as a "qualified tuition program", is an investment vehicle that allows individuals to save for education ...
  3. Can I still set up an SEP if one of my employees refuses to participate?

    You can establish the SEP IRA, even if the employee refuses to participant. However, you would need to establish an IRA for ...
  4. I want to close my IRA account. What percentage will I lose to tax?

    You can move the amount by means of a trustee-to-trustee transfer to another IRA, or roll over the amount to your 401(k). ...
RELATED TERMS
  1. Gold IRA

    Definition of Gold IRA
  2. Eligible Transfer

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

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

    The use – by a business owner or professional practitioner – ...
  5. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  6. MyRA

    A new tax-advantaged retirement account that President Barack ...
comments powered by Disqus
Related Articles
  1. Retirement Strategies For Low Income ...
    Retirement

    Retirement Strategies For Low Income ...

  2. I Was Intimidated By Investing, But ...
    Investing Basics

    I Was Intimidated By Investing, But ...

  3. Impact Of Continuing To Work In Retirement ...
    Retirement

    Impact Of Continuing To Work In Retirement ...

  4. Independent 401(K): A Top Retirement ...
    Retirement

    Independent 401(K): A Top Retirement ...

  5. After-Tax Balance Rules For Retirement ...
    Taxes

    After-Tax Balance Rules For Retirement ...

Trading Center