many years of contributions you should have in there? I’m consolidating a bunch of rollover iras into a a Roth, paying taxes on the money going in, and then combining that with my original roth ira. I understand that the IRS will have records of the taxes I paid on the rollover acocunts but how does it know I didn’t overload my original roth throughout the years, etc.
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Join the ROTH IRA Conversation - Your Questions Discussed
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When you convert to a Roth IRA from a traditional IRA, the taxes are due in the year of the conversion. You would show the conversion on line 11 a and b on the form 1040A or 15 a and b on the form 1040. The amount taxable on the b line transfers to part 2 of the form 8606 and is not subject to the additional tax for early distribution.
Publication 590
http://www.irs.gov/publications/p590/ind
Your best bet is to get all your paperwork in order and look for the nearest office of the Internal Revenue Service-Taxpayer Assistance Division. Here they will answer all your questions and look into what forms you’ll need to get started AND all for free.
Oh,and bring your Social Security card and some ID for identification too just in case.
IRA contributions are reported to the IRS on Form 5498 by the financial entity to which contributions were made. You will receive a Form 5498 for your Roth contributions but are not required to file this form with your tax return.
However, the IRS has a record of all your contributions, so an excess contribution will be known to them.
As an aside, consider keeping amounts converted from traditional IRA separate from your original Roth IRA. Distributions from converted amounts are treated differently, and if you had to take a nonqualified distribution from a Roth IRA that included both conversions and contributions, you would have complications that could have been avoided if the conversions and contributions had been separated.
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