Taxpayers who convert a traditional IRA to a Roth IRA must include the amount transferred in their gross income and pay tax accordingly. For the 2010 tax year, the IRS created special rules enabling taxpayers to convert their traditional IRAs to Roth IRAs with minimal tax liability. Generally, these taxpayers were required to report half of the transferred income on their 2011 return and half on their 2012 return (unless the taxpayer elected to report the income in 2010). Now that the 2012 filing season is upon us, taxpayers who elected to take advantage of this benefit must remember to report the first half of their converted IRA funds on their returns.
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About Berrios & Associates, Inc.
Since 1999, Berrios & Associates, Inc. has been providing a distinctive mixture of leadership-knowledge, and customer service satisfying client needs in advisory, tax, and outsourcing. Serving a diverse client base from individuals and sole proprietors to private corporations with nationwide and international locations. In the domain of accounting firms, Berrios & Associates has engraved a distinctive business based on diverse solutions through the interpersonal relationship of corporate and personal tax, corporate back office support, and business growth advisory. The firm directs clients through their everyday operations to ensure they have the right business model in place to meet their business goals.