What's a Roth IRA conversion?

An overview of the Roth IRA conversion process and the potential tax implications

A Roth IRA conversion is one where a customer takes pre-tax funds from a Traditional IRA or employer-based plan and moves them into a Roth IRA rather than a Traditional IRA.

The amount of funds moved into the Roth IRA are added to the customer’s tax return as taxable income in the year of the conversion. They are not subject to 10% early withdrawal penalty, only income tax. At least 5 years must pass from the conversion date before the funds can be withdrawn without penalty.

If you're considering performing a Roth IRA conversion, consult your accountant, financial advisor, or other tax professional about the tax implications for your situation.

Note: No contents of this blog may be relied upon as tax, legal, or financial advice, as they have not been tailored to you and have not been reviewed by any attorney, financial advisor, or tax professional. For any questions related to your own specific situation, please consult with your own attorney, tax professional, and/or licensed financial advisor.