IRA Rollover

Posts Tagged ‘finance’

Question: Rollover Ira To Roth Ira?

Hi,

I just switched amount in Rollover Ira To Roth Ira. I wanted to pay all the taxes upfront, but the teller representative suggested it’s not a good idea to do it now. Instead, she rollover entire 3K I had in Rollover to my Roth.

What’s the benefits to doing this and when do I pay taxes? I’m only 24 and new to this retirement vehicles. I need to know what actions I must take to stay under the radar.

Thanks!

Answer: You cannot pay all the taxes ahead of time because there is no sure way to know what they will be until you file your income tax return next year.

Your only option for pre-paying taxes is to have withholding taken. But that means you cannot rollover the full distribution.

The teller gave you good advice. Wait until you file your income taxes, and you will have an accurate amount.

Roth IRA Conversions: The Secret (Part 1 of a Series)