by Roth IRA Answer Gal on July 25, 2010
. . . since the Internal Revenue Service taxes them as "earned income" in the year that you roll them over to the IRA, since they weren’t taxed during the tax years when they were being earned and deposited into the 401 (k)?
Or, is the IRS definition of "earned income" different from the Social Security Administration definition of "gainful activity" "earned income", in this case, since you weren’t doing any work to earn the now-taxed income in the specific year that the rollover to the IRA takes place?
by Roth IRA Answer Gal on July 24, 2010
I have several IRA’s that are all funded with after tax contributions and have not been deducted from any tax return. Can I convert then in 2010 to a Roth without any penalty or tax payments?
by Roth IRA Answer Gal on July 23, 2010
I have several IRA’s that are all funded with after tax contributions and have not been deducted from any tax return. Can I convert then in 2010 to a Roth without any penalty or tax payments?
by Roth IRA Answer Gal on July 21, 2010
I contribute to a Roth IRA, but I foresee my income levels in the future causing me to switch to a traditional at some point.
Is it true that distributions from a traditional IRA are taxed at ordinary rates even if the accumulation is from capital gains? If so, why? And does that mean that I should invest in individual stocks and mutual funds in my regular brokerage account and restrict my trad. IRA investments to ordinary income producing investments like bonds? I cannot stand to think of converting capital gains income to ordinary income even if the initial investment is tax deductible.
Also, are those rules the same for 401(k) distributions?
Thanks for any clarification or advice!
I am aware that is the law which is written by congress… that’s why I’m asking is it better to use all IRA funds for ordinary income producing investments and keep capital gain producing investments in a taxable account since there is already a deferral and (probably) preferential rates?
Also, I do not expect to have income that "per year varies considerably". I expect to have steadily increasing income until I retire.
by Roth IRA Answer Gal on July 19, 2010
I have several IRA’s that are all funded with after tax contributions and have not been deducted from any tax return. Can I convert then in 2010 to a Roth without any penalty or tax payments?
