RogerD1
Employee Tax Expert

Get your taxes done using TurboTax

No, converting traditional IRA funds to Roth IRA funds is not income limited.  However, you need to be really cautious with these conversions because the converted amount will be considered taxable income in the year of the conversion.  If you try to convert too much at once, your income could get pushed into a higher tax bracket which will cause you to owe a significant amount of tax on the conversion.

 

Also, you will want to try to pay the tax on the conversion from your own savings or taxable brokerage accounts and not with the IRA funds, because using the IRA funds will generate an additional 10% penalty for withdrawing prior to age 59.5 years old.  You will also want to pay an estimated tax to the IRS (and your state also, if they have an income tax) at the time of the conversion - this will help reduce or eliminate an underpayment penalty when you file your taxes for the conversion.

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