{"id":282,"date":"2011-10-05T04:38:45","date_gmt":"2011-10-05T04:38:45","guid":{"rendered":"http:\/\/ua-cpas.com\/blog\/?p=282"},"modified":"2011-10-05T04:38:45","modified_gmt":"2011-10-05T04:38:45","slug":"convert-roth-to-traditional-ira","status":"publish","type":"post","link":"https:\/\/www.ua-cpas.com\/blog\/index.php\/2011\/10\/05\/convert-roth-to-traditional-ira\/","title":{"rendered":"Deadline to Convert Roth IRAs to Traditional IRA is Oct 17th"},"content":{"rendered":"<p>In 2010, the law permitted you to convert your traditional IRA to a Roth and defer recognizing income on the amount converted until future years. For example, if your account was $100,000 you would declare no income on your 2010 return and $50,000 of taxable income in both 2011 and 2012. As a result of the volatility in the stock market, that $100,000 you converted might only be worth $60,000. Here\u2019s where the problem arises: the tax you pay in 2011 and 2012 on the Roth conversion is NOT based on the current value of the account, but rather on the value at the time of conversion. In our example, assuming a tax bracket of 33%, you would end up with just $27,000 of your original $100,000 investment! ($100,000 investment &#8211; $40,000 loss of market value &#8211; $33,000 Uncle Sam\u2019s portion = <span style=\"text-decoration: underline;\">$27,000<\/span>). There is a solution to this problem, but <strong>the deadline is October 17, 2011<\/strong>.<!--more--><\/p>\n<p>\u00a0Until October 17, a taxpayer can still convert back to a traditional IRA, whether or not an extension was filed on his personal return. The taxpayer must have filed in a \u00a0timely manner \u00a0(April 15<sup>th<\/sup> without extension, October 17<sup>th<\/sup> with extension) to convert back. Taxpayers<strong>\u00a0<\/strong>who prefer the Roth IRA for the future can switch back to one\u00a030 days after the conversion back to Traditional IRA.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Amounts converted from Traditional IRAs to Roth IRAs in 2010 may be converted back in 2011. The deadline is October 17, 2011. Taxpayers pay taxes on the value of the IRA at the date of conversion, not on the current value of the securities. Stock values may have decreased causing many taxpayers to pay taxes on amounts which disappeared.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22,23],"tags":[175],"class_list":{"0":"post-282","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-tax-tips-for-individuals","7":"category-taxes","8":"tag-roth-iras","9":"entry"},"_links":{"self":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/282","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=282"}],"version-history":[{"count":0,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/282\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}