If you converted a Roth IRA during 2009 and you wish you hadn’t due to the decline in the stock market, you still have an out. Taxpayers can “undo” their 2009 Roth conversions up until October 15, 2010.

Undoing a Roth conversion can save taxes if the investments converted have decreased in value. If you still desire to convert the IRA, you can reconvert it 30-days after you undo the original conversion.

Don’t forget in 2009 only taxpayers with Adjusted Gross Income of $100,000 or less could convert to a Roth IRA. However, this requirement was repealed beginning in 2010 so anyone can convert to a Roth.

The taxes owed as the result of a Roth conversion in 2010 can also be spread over a 2-year period. This includes Roth conversions that were undone for 2009 and reconverted in 2010.

Please contact an ARB income tax specialist if you would like us to evaluate your circumstances.

This entry was posted on Tuesday, August 31st, 2010 at 11:56 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.