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Posted by Benjamin Yazersky CPA on February 13, 2007, 2:27 am
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> We have just completed our 2006 tax return (married filing
> jointly) and our AGI is about $50,900. This puts us just out
> of reach of the retirement savings tax credit, which would
> give us $200 if we could get our AGI down to $50,000 or
> below. It would be $400, but one of us was a student last
> year so it's only $200. We each contributed $4000 to our
> Roth IRAs in 2006. Here's the question: Can we do some
> shuffling to claim the credit, and then shuffle back
> afterwards? This would involve a conversion or
> recharacterization (not sure which one) of $900 from one of
> the Roths to a traditional IRA, effective in tax year 2006,
> deducting $900 from our AGI. More questions:
>
> If we can do the above, can we move the $900 back to the
> Roth (and pay income tax on it, of course) effective in 2007
> or 2008? It's important to us that this money end up in a
> Roth, as we plan to be in a higher tax bracket when we
> retire than we are now.
>
> Will doing this limit our ability to contribute $4000 each
> (in addition to the $900) to our Roths in 2007 and $5000
> each in 2008?
>
> Finally, is all this worth the effort for a measly $200?
not worth the effort
___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----
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