Did you convert a traditional IRA into a Roth account last year? In 2010, conversions were allowed no matter how high your income. Is the Roth IRA now worth less than on the conversion date thanks to the stock market’s erratic performance? If you answered YES to both questions, then you will have pay taxes on the phantom value that no longer exists. Fortunately, you can reverse a 2010 Roth conversion which means the inflated conversion tax bill disappears. To take advantage, you only have until October 17, 2011 to reverse a 2010 conversion.
- Save on Taxes with a Roth Conversion Right Now (dailyfinance.com)