No. You can convert several IRAs – SEP, Simple IRA, regular IRA or Rollover IRA– to a Roth IRA as long as your modified adjusted gross income is below $100,000

A Roth IRA conversion can be done at any time before the end of the year. Do not confuse the Roth IRA April 15 of the following year contribution deadline with the December 31 Roth IRA conversion deadline. No. Because SEP and SIMPLE IRAs are already IRAs, you can convert them directly to a Roth IRA. However, for a Simple IRA, you must hold your Simple IRA account for at least 2 years before converting it to a Roth IRA.

A ROTH IRA is an individual retirement account established by individuals that provides tax-free income after 5 years and age 59-1/2.

You can't contribute to a Roth IRA for a year with income above $110,000 if single or $160,000 on a joint return. You must have earnings from personal services-$4,000 or more to make the (maximum) contribution - though an additional contribution of $1,000 is allowed persons age 50 and over. The $4,000 amount for earnings and contributions rises higher after 2007.

Withdrawals-if they qualify-are completely exempt from income tax, unlike all other retirement plans. Many can quickly build up their Roth IRA accounts by converting traditional IRAs into Roth IRAs-at a tax cost. Since you need not withdraw from your Roth IRA at any age, more can be passed on to heirs than would be allowed under other plans.

To build a sizable Roth IRA fund, you must convert a traditional IRA (or, after 2007, funds form an employer plan). Conversions are taxable. In converting to a Roth IRA, you risk an excess contribution penalty and an early withdrawal penalty, if income exceeds $100,000.

Yes, as long as the total amount of your contributions does not exceed the maximum annual contribution (outlined above). For example, in 2007, if you were eligible to contribute $2,000 to a deductible IRA, you could also contribute $2,000 to a non-deductible IRA or Roth IRA.

No, there are no limits on income in determining if designated Roth contributions can be made. Of course, you have to have salary from which to make any 401(k) or 403(b) deferrals. The employer can make matching contributions on designated Roth contributions. However, only an employee's designated Roth contributions can be allocated to designated Roth accounts.

Rollover - A distribution from a traditional IRA can be contributed to a Roth IRA within 60 days after distribution. Trustee-to-trustee transfer - The financial institution holding the traditional IRA assets will provide directions on how to transfer those assets to a Roth IRA with another financial institution.

With a Traditional IRA, the contributions you make are typically deductible for the year the investment is made and taxable when the funds are withdrawn from the IRA. With a Roth IRA, the contributions are not deductible for the year the investment is made but when you take a "qualified distribution" the distribution is taken tax free.

Yes, you can. But remember that you can only contribute up to $3,000 per year to any combination of Traditional and Roth IRAs that you have. You cannot contribute $3,000 to each.

If your income falls below a certain limit, you can convert any amount in your Rollover or regular IRA to a Roth IRA. Caution: You must pay taxes on any amounts converted from your Rollover or regular IRA to a ROTH IRA. Maybe. Your converted retirement funds in your Roth IRA will grow tax free as opposed to growing on a tax-deferred basis. In essence, you stop the tax clock by paying your taxes today on your retirement funds for the benefit of withdrawing your money tax-free tomorrow.

You can contribute up to $4,000 ($4,500 if you are age 50 or older in 2005 and $5,000 if you are age 50 or older in 2006) or up to 100% of your compensation whichever is less. If you are eligible to do so, you may contribute to both a Traditional IRA and a Roth IRA in the same year, but the total amount you contribute cannot exceed the annual limits. Roth IRA contributions are not tax deductible.

Money can be withdrawn at any time. However, earnings included in distributions taken prior to age 59 ? may be subject to both income tax and a 10% federal penalty tax, as shown below in the next question. Conversion amounts may also be subject to the 10% penalty.

There are three different tax treatments for distributions of earnings from Roth IRAs. The distribution is either: The income tax applies to all withdrawals of earnings made before the "Five-Year Holding Period" is satisfied even if the Roth IRA owner is over 59 1/2, disabled, dies or uses the distribution for a first home purchase.

Yes, generally under the same terms as traditional IRAs. Also, ordinary income tax is somewhat less likely, or may be smaller in amount, than with traditional IRAs.

Yes, subject to the income conditions above. This allows contributions of $4,000 each if the couple's earnings are at least $8,000 after 2004; higher amounts after 2007.