Third, the earnings that you have built up in your traditional IRA are also regarded as pretax by the Internal Revenue Service (IRS). When you convert after-tax money from a traditional IRA to a Roth IRA, the amount is tax-free because you have already paid taxes on those funds. The ...
If you contributed more than the maximum deductible amount to your 401(k), you have some post-tax money in there. You may be able to avoid some immediate taxes by allocating the after-tax funds in your retirement plan to a Roth IRA and the pretax funds to atraditional IRA. You should...
IRAs,SEPIRAsandSIMPLEIRAs(those thathaveexisted oratleasttwoyears)to aRothIRA.Inaddition,anindividualcan directlyconvertassets romaqualifed employerretirementplan,suchasa 401(k)or403(b),toaRothIRA,bypassing theirtraditionalIRA. However,the actthatyoucanconvert ...