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Two Tax Time IRA Questions

By Beverly DeVeny, IRA Technical Expert
Follow Me on Twitter: @BevIRAEdSlott

Here are two questions that come up a lot at tax time.

Q. Can I do a conversion now for 2011?
A. No. In order to have a 2011 conversion, the funds must leave the IRA account in 2011. They don’t have to be in the Roth IRA in 2011 since you can take a withdrawal in December, 2011 and have 60 days to complete a rollover to the Roth IRA in January or February, 2012. But they must leave the traditional IRA account by December 31, 2011.

Q. Joe died last year. He had earned income. Can we make a contribution to his IRA or Roth IRA account for last year?
A. No. You can only make a contribution for someone who is alive. The theory behind this is that if someone dies during the tax year, they no longer have a need to save for retirement. You just can’t argue with that logic!!!
 




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