Questions: When can I rollover my Traditional IRA to a Roth IRA? When should I make a contribution to my Roth IRA? When should I make a contribution to my Traditional IRA? What do I do if I am missing a W-2? Answers: When can I rollover my Traditional IRA to a Roth IRA? You may be able to roll funds over from a regular IRA into a Roth IRA so the post-rollover income can grow tax-free in the Roth IRA. (Converting a regular IRA into a Roth IRA is treated as such a rollover.) You can roll funds over from a regular IRA to a Roth IRA only if your AGI, calculated with specified modifications, does not exceed $100,000 in the rollover year. Any funds rolled over will be taxed under the regular IRA distribution rules as if there were no rollover. The 10% early withdrawal penalty will not apply to the rollover. However, if rolled over funds are withdrawn within the five year period that renders them taxable, the 10% penalty will apply to the withdrawal. (Beginning in 2010, the $100,000 AGI ceiling on conversions from a traditional IRA to a Roth IRA will be removed.) Ordering rules apply if a Roth IRA contains conversion amounts (possibly from different years) as well as other contributions. The regular Roth IRA contributions are treated as withdrawn first and then converted amounts, starting with amounts first converted. Withdrawals of converted amounts will be treated as coming first from amounts already included in income. Earnings are treated as withdrawn after contributions. For these purposes, all Roth IRAs will be treated as a single Roth IRA. Top When should I make a contribution to my Roth IRA? For 2009, you can contribute up to $5,000 to a Roth IRA (as long as you have compensation for the year at least equal to the contributed amount). After 2009, the $5,000 limit will be increased when the cost-of-living index warrants it. Individuals age 50 or older can make additional contributions of $1,000. Thus, the limit is $6,000 a year for people who will be age 50 (or older) during 2009. However, the maximum contribution allowance must be reduced by any contributions (deductible or nondeductible) you make to “regular” IRAs. Unfortunately, there are some limits on Roth IRA contributions. For single taxpayers, if adjusted gross income (AGI) is $116,000 or more, no contribution can be made to a Roth IRA. If AGI is between $101,000 and $116,000, the $5,000 maximum contribution is phased out (reduced) according to a formula. For married taxpayers filing jointly, no contribution can be made if AGI is $169,000 or more, and the $5,000 maximum (per spouse) is phased out for AGIs between $159,000 and $169,000. For married taxpayers filing separately, the allowable contribution is phased out for AGIs between $0 and $10,000. You may be allowed a credit against your income tax equal to a percentage of your Roth IRA contribution if your AGI doesn't exceed certain levels (which are much lower than the phase-out AGI levels above). Contributions can be made to Roth IRAs even if you are a participant in a qualified plan and even if you reach age 70 1/2. Top When should I make a contribution to my Traditional IRA? You can make an annual deductible contribution to an IRA if: (1) you (and your spouse) are not an active participant in an employer-sponsored retirement plan, or (2) you (or your spouse) are an active participant in an employer plan, and your modified adjusted gross income (AGI) doesn't exceed certain levels that vary from year-to-year by filing status. Deductible IRA contributions reduce your current tax bill, and earnings within the IRA are tax-deferred. However, every dollar you take out is taxed in full (and subject to a 10% penalty if you withdraw money before age 591/2, unless one of several exceptions apply). You must begin making minimum withdrawals by April 1 of the year following the year you attain age 70 1/2. Top What do I do if I am missing a W-2? Did you get your W-2? These documents are essential to filling out most individual tax returns. You should receive a Form W-2, Wage and Tax Statement, from each of your employers each year. Employers have until February 1, 2010 to provide or send you a 2009 W-2 earnings statement either electronically or in paper form. If you haven’t received your W-2, follow these steps: 1. Contact your employer. If you have not received your Form W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2. 2. Contact the IRS. If you still do not receive your W-2 by February 17th, contact the IRS for assistance at 800-829-1040. When you call, have the following information: Employer's name, address, city, and state, including zip code; Your name, address, city and state, including zip code, and Social Security number; and An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible. 3. File your return. You still must file your tax return on time even if you do not receive your Form W-2. If you have not received your Form W-2 by February 17th, and have completed steps 1 and 2 above, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified. 4. File a Form 1040X. On occasion, you may receive your missing documents at a later date and some may have conflicting information. You may receive a Form W-2 or W-2C (corrected form) after you filed your return using Form 4852, and the information differs from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return. Form 4852, Form 1040X, and instructions are available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676). Top