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Old 02-16-2013, 10:26 AM
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roll over

I did a traditional IRA to Roth IRA roll over during tax year 2012; taxes were deducted but not enough.
Can I have more deducted from what is now the Roth IRA to pay these taxes?



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Old 02-16-2013, 08:41 PM
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Realize that rolling over your traditional IRA to a Roth IRA requires that you pay taxes on all the gains made by your Traditional IRA. You are essentially cashing out your Traditional IRA and paying taxes then reinvesting the funds in a Roth IRA. Unlike qualifying contributions that you make to a traditional IRA, contributions to a Roth IRA are always made on a post-tax basis. Consequently, you cannot claim your contribution to your Roth as a tax deduction.The idea is to pay taxes now so you can avoid paying taxes when you retire. This makes sense for someone who has a long time until retirement or doesn't like the traditional IRA rules. Roth IRA contributions cannot be deducted from your income on your tax return. The advantage to a Roth IRA over a traditional IRA is that the contributions and earnings will be withdrawn tax-free upon retirement because contributions are taxed as they enter the plan. This makes Roth IRAs appealing to people who are in a lower tax bracket now than they anticipate being in at retirement.



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