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previous page Previous Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Can You Contribute to a Roth IRA?
next page Next Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Are Distributions Taxable?
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p590-017.htm#en_us_publink10006513

Can You Move Amounts 
Into a Roth IRA?(p64)


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previous topic occurrence Can You Move Amounts Into a Roth IRA? next topic occurrence

You may be able to convert amounts from either a traditional, SEP, or SIMPLE IRA into a Roth IRA. You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA.
taxmap/pubs/p590-017.htm#en_us_publink10006514

Conversions(p65)


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You can convert a traditional IRA to a Roth IRA. The conversion is treated as a rollover, regardless of the conversion method used. Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another, apply to these rollovers. However, the 1-year waiting period does not apply.
taxmap/pubs/p590-017.htm#en_us_publink10006515

Conversion methods.(p65)


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You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways.
taxmap/pubs/p590-017.htm#en_us_publink10006516

Same trustee.(p65)
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Conversions made with the same trustee can be made by redesignating the traditional IRA as a Roth IRA, rather than opening a new account or issuing a new contract.
taxmap/pubs/p590-017.htm#en_us_publink10006517

More information.(p65)


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For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1.
taxmap/pubs/p590-017.htm#en_us_publink100049278

Rollover From Employer's Plan Into a Roth IRA(p65)


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Rollover From Employer's Plan Into a Roth IRA

Prior to 2008, you could only roll over (convert) amounts from either a traditional, SEP, or SIMPLE IRA into a Roth IRA. Beginning in 2008, you can roll over into a Roth IRA all or part of an eligible rollover distribution your receive from your (or your deceased spouse's): Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan.
taxmap/pubs/p590-017.htm#en_us_publink100049570

Income.(p65)


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You must include in your gross income distributions from a qualified retirement plan that you would have had to include in income if you had not rolled them over into a Roth IRA. You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions (after-tax contributions) to the plan that were taxable to you when paid.
taxmap/pubs/p590-017.htm#en_us_publink100049571

Example.(p65)

In July of 2008, you decide to roll over $50,000 from your 401(k) plan to your Roth IRA. You have no after-tax contributions. For 2008, you must include in income $50,000.
EIC
If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. See Publication 505, Tax Withholding and Estimated Tax.
taxmap/pubs/p590-017.htm#en_us_publink100049573

Rollover methods.(p65)


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You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways.
For more information on eligible rollover distributions from qualified retirement plans and withholding, see Rollover From Employer's Plan Into an IRA in chapter 1.
taxmap/pubs/p590-017.htm#en_us_publink100049574

How to report.(p65)


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A rollover to a Roth IRA is not a tax-free distribution other than any after-tax contributions you made. Report a rollover from a qualified retirement plan to a Roth IRA on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b.
Enter the total amount of the distribution before income tax or deductions were withheld on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. This amount is shown in box 1 of Form 1099-R. From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Enter the remaining amount, even if zero, on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b.
taxmap/pubs/p590-017.htm#en_us_publink100049279

Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments(p65)


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Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments

If you received a military death gratuity or SGLI payment with respect to a death from injury that occurred after October 6, 2001, you can contribute (roll over) all or part of the amount received to your Roth IRA. The contribution is treated as a qualified rollover contribution.
The amount you can roll over to your Roth IRA cannot exceed the total amount that you received reduced by any part of that amount that was contributed to a Coverdell ESA or another Roth IRA. Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers.
The rollover must be completed before the end of the 1-year period beginning on the date you received the payment. However, if you received a military death gratuity or SGLI payment with respect to a death from injury that occurred after October 6, 2001, and before June 17, 2008, you have until June 17, 2009, to make the contribution to your Roth IRA.
The amount contributed to your Roth IRA is treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed.
taxmap/pubs/p590-017.htm#en_us_publink10006519

Failed Conversions and Rollovers(p66)


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If, when you converted amounts from a traditional IRA or SIMPLE IRA into a Roth IRA or when you rolled over amounts from a qualified retirement plan into a Roth IRA, you expected to have modified AGI of $100,000 or less and a filing status other than married filing separately, but your expectations did not come true, you have made a failed conversion or failed rollover.
taxmap/pubs/p590-017.htm#en_us_publink10006520

Results of failed conversions and failed rollovers.(p66)


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If the converted or rolled over amount (contribution) is not recharacterized (explained in chapter 1), the contribution will be treated as a regular contribution to the Roth IRA and subject to the following tax consequences.
taxmap/pubs/p590-017.htm#en_us_publink10006521

How to avoid.(p66)
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You must move the amount converted or rolled over (including all earnings from the date of conversion or roll over) into a traditional IRA by the due date (including extensions) for your tax return for the year during which you made the conversion or roll over to the Roth IRA. You do not have to include this distribution (withdrawal) in income.
taxmap/pubs/p590-017.htm#en_us_publink10006522

Rollover From a Roth IRA(p66)


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You can withdraw, tax free, all or part of the assets from one Roth IRA if you contribute them within 60 days to another Roth IRA. Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another, apply to these rollovers. However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers.
A rollover from a Roth IRA to an employer retirement plan is not allowed.
A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA.
taxmap/pubs/p590-017.htm#en_us_publink1000124847

Rollover of Exxon Valdez Settlement Income(p66)


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If you are a qualified taxpayer and you received qualified settlement income, you can contribute all or part of the amount received to an eligible retirement plan which includes a Roth IRA. The rules for contributing qualified settlement income to a Roth IRA are the same as the rules for contributing qualified settlement income to a traditional IRA with the following exception. Qualified settlement income that is contributed to a Roth IRA, or to a designated Roth account, will be:
For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1.
taxmap/pubs/p590-017.htm#en_us_publink1000125436

Rollover of Airline Payments(p66)


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Rollover of Airline Payments

If you are a qualified airline employee, you may contribute any portion of an airline payment you receive to a Roth IRA. The contribution must be made within 180 days from the date you received the payment, or before June 23, 2009, whichever is later. The contribution will be treated as a qualified rollover contribution and the modified AGI limits that generally apply to Roth IRA rollovers do not apply to airline payments. The rollover contribution is included in income to the extent it would be included in income if it were not part of the rollover contribution. Also, any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can contribute to your Roth IRA.
taxmap/pubs/p590-017.htm#en_us_publink1000125437

Airline payment.(p66)


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An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. The payment also must be made both: An airline payment amount shall not include any amount payable on the basis of the carrier's future earnings or profits.
taxmap/pubs/p590-017.htm#en_us_publink1000125438

Qualified airline employee.(p66)


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A qualified airline employee is an employee or former employee of a commercial airline carrier who was a participant in a qualified defined benefit plan maintained by the carrier which was terminated or became subject to restrictions under Section 402(b) of the Pension Protection Act of 2006.
For more information, see Form 8935, Airline Payment Report. This form will be sent to you within 90 days following an airline payment, or by March 23, 2009, whichever is later. The form will indicate the amount of the airline payment that is eligible to be rolled over to a Roth IRA.
previous pagePrevious Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Can You Contribute to a Roth IRA?
next pageNext Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Are Distributions Taxable?
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication