Use Roth IRA assets to get a deduction?
Terry, With your help 10 years ago, I was able to move $140,000 from a traditional IRA to a Roth IRA. The taxes were paid using an adoption tax credit. My wife and I adopted twins from Russia. 10 years later my AGI has grown above the savers and earned income tax credit range. I’m currently in my 50’s. Can I move $6,500 from the Roth IRA back to the Traditional IRA? I think this will reduce my AGI back to the savers and earned income tax credit range.
Terry Says
Well, you've held your Roth long enough to move money out without penalty -- BUT I highly suggest you DONT! This money will continue to grow tax-free -- and an be passed on to your children tax-free, and continue to grow. And there will be no required distributions from it. This is a very valuable nest egg! And I suppose you could use that money to make a deductible contribution to another IRA -- IF you have earned income of at least that amount. But that's really silly and counter-productive. Pay the taxes on your income now. Or open a deductible IRA or contribute to a 40l(k), or a health savings account, to reduce your AGI!!
