Don’t Forget the Second Half of That Roth Conversion!

Recall that IRS allowed you to convert your IRA to Roth IRA status in 2010, while spreading the tax hit over two years: 2011 and 2012. Normally, Roth conversions are taxable in the year the conversion occurs. For example, the taxable amount from a 2012 conversion must be included in full on your 2012 return. But now is the time to remember to report the second half of that 2010 conversion you made.

Roth conversions in 2010 from traditional IRAs are shown on Form 1040, Line 15b.

Check out IRS Publication 590 and IRS Publication 575 for more info.