taxable rollover to Roth when married filing separately

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  • #1368
    RustyShackleford
    Participant

    For some years now, being retired, I have done taxable rollovers from my TIAA-CREF 401(a) retirement account to my Roth IRA at a brokerage. I think of this as the “moral equivalent” of a Roth conversion, since the T-C account is funded with pre-tax dollars (with a small amount of after-tax contributions) and growth is tax-deferred.

    I just got married, and am researching the filing-separately versus filing-jointly question. I came across this item, in a list of disadvantages of filing separately: the taxpayer cannot roll over amounts from an eligible retirement plan (other than a Roth IRA or designated Roth account) into a Roth IRA.

    I’m wondering if this applies to my taxable rollovers. I can’t find any corroboration of its being disallowed. I can’t see why it would be, since as I said, it’s much like a Roth conversion, and generates a tax liability (popular with the IRS).

    #1370
    Alan S.
    Participant

    This could not be done filing MFS until 2010. Effective in 2010 along with the income limit for Roth conversions being eliminated, the MFS restriction was also removed. Therefore, starting in 2010, you can roll non Roth retirement funds into your Roth IRA with no filing status or income restrictions.

    However, starting this year your ability to recharacterize such a rollover has also been eliminated, so you must be real sure that the tax liability created by such a rollover is affordable and acceptable to you.

    #1372
    RustyShackleford
    Participant

    Thanks !

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