How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Bill Your Own Question
Bill
Bill , Financial Advisor
Category: Finance
Satisfied Customers: 3151
Experience:  EA, CEBS - 35 years experience providing financial advice
6480514
Type Your Finance Question Here...
Bill is online now
A new question is answered every 9 seconds

I have a very low income for 2011 because I am unemployed on

Resolved Question:

I have a very low income for 2011 because I am unemployed on social security.

However, I am doing my 2010 taxes right now, they're due Oct 15, 2011 because of an extention.

I want to transfer money from a 401K account into a Roth IRA for the tax year 2010 which will raise my income.

Can I still do it right now, or is it too late?

When is the last time I can transfer money from a 401K to a Roth IRA for the 2011 tax year?

Thank you.
Submitted: 4 years ago.
Category: Finance
Expert:  Bill replied 4 years ago.
It is too late for the 2010 tax year as it had to be done by 12/31/10. You would have until 12/31/11 to do the conversion/rollover for the 2011 tax year.
Customer: replied 4 years ago.
Also, when I rollover my 401K to my Roth IRA. Is it counted as ordinary income (like a W-2?), and should I only transfer enough to keep me in the lowest tax bracket?

I have rental losses and business losses from previous years, is there a way to use those losses to allow me to contribute a larger about from my 401K to my Roth IRA and still remain in a low tax bracket (say 15% tax bracket)?

My tax bracket right now is really low, I make like $18,000 from social security, then I deduct rental losses, so I make almost $10,000 or less. I have a bunch of business losses (which I don't know how to find) from a professionally prepared tax preparer from last year during my divorce - how do I find those business losses (i.e. which form) and how do I apply them to the gains I would have if I convert my 401K to a Roth so I can determine how much to convert this year in 2011.

Thank you.
Expert:  Bill replied 4 years ago.

Yes, the rollover is treated as ordinary income and moving only enough to keep you in a low bracket is a good idea. If you had a net operating loss then Schedule A of Form 1045 may have been completed by the tax preparer. This IRS publication explains net operating losses:

http://www.irs.gov/pub/irs-pdf/p536.pdf

Customer: replied 4 years ago.
Can I also include rental income loss and student tuition losses/lifetime learning credits against the income from a 401k to a Roth IRA rollover? Does require any other additional forms?

I'm trying to look for any expenses/losses that I took to minimize the taxes that I pay in the 401k to Roth IRA rollover. The ones I see are:

1) previous business losses carried forward from my divorce a few years ago
2) rental income losses from this year and previous years
3) student tuition expenses through the lifetime learning credits
4) medical and dental expenses, bank fees and other expenses from Schedule A (including tax prep fees?)
5) stock losses
6) any others you can think of?
Expert:  Bill replied 4 years ago.

Yes, all of those items can be claimed as deductions and credits. However, some of those deductions may not be available since they must exceed certain limits (for example medical expenses must exceed 7.5% of AGI, miscellaneous expenses must exceed 2% of AGI, stock losses are limited to $3,000, etc). Here is a list of other deductions - http://www.irs.gov/taxtopics/tc500.html

Bill and other Finance Specialists are ready to help you

Related Finance Questions