IRA Rollover

Posts Tagged ‘rollover ira conversion to roth’

Question: Is a conversion from a Rollover Ira To Roth Ira considered a contribution? Which tax year do I pay taxes for?

I opened up a Rollover IRA last week (Feb ’08) and rolled over my previous employer’s 401k to this new Rollover IRA. A few days later I opened up a Roth IRA and converted the money from the Rollover to the Roth. I have a few questions. Is this conversion considered a contribution? I know I have to pay taxes on the money I rolled over (because they came from a 401k), but do I have to pay it for my 2007 taxes or can I pay them for my 2008 taxes?

Answer: It is not a contribution. You will pay taxes on it for 2008. You will receive a 1099R for the rollover from the 401k to the IRA, and a 1099R for the conversion from the IRA to the Roth IRA, to be included in your 2008 tax return.

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