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Retirement rollover tax question
Posted on 3/9/17 at 3:01 pm
Posted on 3/9/17 at 3:01 pm
My financial advisor and accountant are arguing over this. Which is it?
I was a teacher in MS for two years and the tax-defered plan for retirement is PERS. It accumulated about $9k before I left to work in TN. So, I rolled that money into a Roth IRA. This process was done about a year ago.
My accountant says I owe on the money and my advisor says I do not until I retire (59 1/2 YO).
Which one is correct? This money would come out to a little over $2,000 in my tax bracket if I have to pay it now.
I was a teacher in MS for two years and the tax-defered plan for retirement is PERS. It accumulated about $9k before I left to work in TN. So, I rolled that money into a Roth IRA. This process was done about a year ago.
My accountant says I owe on the money and my advisor says I do not until I retire (59 1/2 YO).
Which one is correct? This money would come out to a little over $2,000 in my tax bracket if I have to pay it now.
7
Posted on 3/9/17 at 3:11 pm to rpg37
I've always understood that the tax is due when the rollover occurs. I think your CPA is right on this one.
Posted on 3/9/17 at 3:12 pm to rpg37
I'm guessing the retirement contribution to PERS was pre-tax along with a match / earnings credit.
You owe tax on the conversion. Just like any other Roth Conversion.
Find a new advisor.
You owe tax on the conversion. Just like any other Roth Conversion.
Find a new advisor.
Posted on 3/9/17 at 3:28 pm to rpg37
But just think of all the tax-free growth and distributions when you write the check to Uncle Barry this year.
Posted on 3/9/17 at 6:47 pm to rpg37
If you roll from a tax deferred plan into a Roth IRA the taxes are due that tax year.
Posted on 3/9/17 at 7:22 pm to rpg37
What does your 1099-R say?
If your advisor is correct, then you don't actually have a Roth. If you have a Roth, your advisor is pretty terrible at his job.
If your advisor is correct, then you don't actually have a Roth. If you have a Roth, your advisor is pretty terrible at his job.
This post was edited on 3/9/17 at 7:58 pm
Posted on 3/9/17 at 9:51 pm to rpg37
CPA wins everytime...
Posted on 3/10/17 at 10:47 pm to rpg37
Yes-I'm an advisor and you owe the tax now. It can be spread out over five years, but has to be setup that way.
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