This question comes up ever January. Can I still do a Roth conversion for last year? After all, I have until April 15th to make a contribution to my IRA or Roth IRA for last year, so can I still do a conversion for last year?
The answer is no. While there may be an exception for contributions, there is no corresponding exception for conversions (or distributions). In order to have a 2011 Roth conversion, the funds must leave the IRA or employer plan by December 31, 2011.
The funds do not have to be in the Roth IRA by that date, but they must be out of the IRA by the end of the year. You can do a 60-day rollover where the funds leave the IRA on December 10, 2011 and are deposited in the Roth IRA on February 8, 2012. This is a 2011 conversion since the funds left the IRA in 2011.
If you missed the 2011 deadline and still want to do a Roth conversion, make sure you do not miss the deadline for 2012. You still have those low income tax rates in effect for 2012 so be sure to take advantage of them.
-By Beverly DeVeny and Jared Trexler
Smart money/Coming Soon
Mailbag
Thursday's Slott Report Mailbag
Consumers: Send in Your Questions to [email protected]
Q:
Can I transfer money from my IRA to my husband's Roth IRA? I am 35, and he is 36.
Thank you!
Gail Clements
A:
No. The only way your IRA funds can be transferred to your husband’s IRA is in a divorce or after your death. Even then, it would have to be transferred to a similar IRA, for example an IRA to IRA or a Roth IRA to another Roth IRA. In this case, you cannot transfer your IRA into your husband’s Roth IRA.
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