2010 IRA to Roth Rollover

Today TaxMama hears from Billie in the TaxQuips Forum who’s getting conflicting information. “In 2010 there was this nice ‘deferment’ one could take advantage of when converting a traditional IRA to a ROTH. By doing that in 2010, you could postpone half of the taxes due to 2011 and the other half to 2012. My question is, on April 15th of which year was the tax due? Was it April 18, 2011 and 2012? Or was it April 15, 2012 and April 2013? I’ve had both answers to this question, and NEED to know the REAL deal!”

Hi Billie,  

I love it when I get easy questions.  

Here’s what IRS says in Publication 590, in the What’s New for 2010 area.

 Conversions and rollovers to Roth IRAs. The modified AGI and filing status requirements for converting and rolling over amounts to a Roth IRA are eliminated. Also, for any 2010 conversion or rollover, any amounts that would be included as income will be included in income in equal amounts in 2011 and 2012. You can choose to include the entire amount in income in 2010.

So, that means, if you (or the client) did not elect to report the full amount on the 2010 tax return, it may be reported half on the 2011 tax return (filed April 15, 2012) and half on the 2012 tax return (filed April 15, 2013).

 There’s time to pay!

And remember, you can find answers to all kinds of questions about Roth rollovers and other tax issues, free. Where? Where else? At www.TaxMama.com.

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