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Old 01-06-2010, 07:03 PM
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What are 2010 Rules for Roth IRAs?

The IRS has stated that "beginning January 1, 2010, the income and filing status requirements for rollovers (including conversions) to a Roth IRA was eliminated. Additionally, for rollovers to a Roth IRA in 2010 only, a special 2-year option for reporting taxable portions of your rollover apply."

Thus, under the new rules, regardless of the income or filing status, taxpayers may roll over (convert) the following types of retirement plans to a Roth IRA:

1. a Taxpayers traditional individual retirement arrangement (IRA), SEP IRA or SIMPLE IRS.

2. an Eligible rollover distribution (ERD), for example, a 401(k) or a 403(b) plan.

3. an Eligible rollover from a retirement plan for which the taxpayer is a beneficiary.

For rollovers and conversions to a Roth IRA in 2010 only, taxpayers have the option of reporting the taxable portion of their rollover in their gross income 2010, or reporting half in 2011 and half in 2012.

Previously, to roll over to a Roth IRA, both of these requirements needed to be met; that is the taxpayers modified AGI was less than $100,000 and their filing status was not married filing separate.

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