I’ve been making steady contribution to a Roth IRA account for quite a few years, however, since the edition of my rental business, it drives up my income surpassing the Federal limit for contribute to my Roth IRA account.
Roth IRA phase-Outs. In 2015, the AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014. For singles and heads of household, the income phase-out range is $116,000 to $131,000, up from $114,000 to $129,000.
At the first glance, I thought I should just give up contribution until I quit working full time, at that point my income would surely allows me to slowly convert my 401K to Roth IRA at 0 or 15% tax. However, a smart blogger, Investment Hunting told me I should do a conversion. I thought about it, but I’ve been busy planning my 5 summer vacations, the market took a beating, I was busy buying. Now that the market has recovered. I decided to sell some stocks to in my taxable account, then put it in my IRA account, then convert it to my Roth IRA account. This is the first time I’m attempting at this, so the process may takes awhile.
- Open an IRA account (I’ve already had one)
- Open a Roth IRA account (I’ve already had one)
- Call the 1800 number for them to email or mail the form, fill it out, fax it back
- Wait for the paper work to take place and the fund to become available
I don’t want to make any divestment, as selling securities is not my goal at this point, growing dividend is my goal, position that I use for this exchange is V, D, and GE. I’ll simply buy them back once the fund become available.
Have anyone of you done this before? What was your process like? How did you file the taxes?