{"id":1028,"date":"2011-01-17T12:21:43","date_gmt":"2011-01-17T17:21:43","guid":{"rendered":"http:\/\/www.billlosey.com\/?p=1028"},"modified":"2011-01-17T12:21:43","modified_gmt":"2011-01-17T17:21:43","slug":"ira-changes-for-2011-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/ira-changes-for-2011-what-you-need-to-know\/","title":{"rendered":"IRA Changes For 2011 – What You Need To Know!"},"content":{"rendered":"

You can\u2019t defer income resulting from a Roth IRA conversion in 2011. <\/strong>If you converted a traditional IRA to a Roth IRA in 2010, you could opt to divide the income resulting from the conversion between your 2011 and 2012 federal tax returns. (If you did go Roth in 2010, you have until October 17, 2011 to choose this income deferral option.) You don\u2019t have this choice in 2011 – the income can\u2019t be deferred to a future tax year.<\/p>\n

The IRA charitable rollover is back.<\/strong> In 2011, IRA owners aged 70\u00bd or older can again donate IRA proceeds to charity tax-free. The Tax Relief Act of 2010 brought back the opportunity, at least for this year.\u00a0 A charitable IRA rollover lets an IRA owner gift up to a total of $100,000 in IRA assets to one or more qualified charities or non-profit organizations. The distribution has to go directly from the IRA custodian to the charity. You don\u2019t get a tax deduction for the move, but you could use this qualified charitable distribution to fulfill some or all of your 2010 RMD.<\/p>\n

The Tax Relief Act also gives IRA owners until January 31, 2011 to make 2010 charitable IRA donations. <\/sup>So you could transfer up to $100,000 from your IRA to a charity in January and have it retroactively count as a 2010 distribution, then transfer another donation of up to $100,000 to the charity later this year.<\/p>\n

Here\u2019s the irritating asterisk on all this: if you took your 2010 RMD assuming that you couldn\u2019t make a charitable IRA donation in 2010, there is no do-over available. You can\u2019t put back your 2010 RMD into your IRA and redirect those assets toward charity. The IRS issued a statement on January 5 citing existing language in IRS Publication 590, explaining that \u201crequired minimum distributions (RMD) from an IRA received by a taxpayer cannot be rolled over to an IRA.\u201d<\/p>\n

You have three extra days to make your 2010 IRA contribution.<\/strong> The District of Columbia observes Emancipation Day on April 15, so the deadline for your 2010 IRA contribution is April 18, 2011. (Remember to tell your IRA custodian that you are making a contribution for the 2010 tax year.)<\/p>\n

You may have a chance to go Roth with your 401(k) or 403(b) in 2011.<\/strong> As a result of the Small Business Jobs Act of 2010, some employer-sponsored retirement plans are now allowing in-plan Roth conversions, i.e., the chance to \u201cconvert\u201d a percentage of the pre-tax dollars you have saved to after-tax dollars without the necessity of a rollover to a Roth IRA. However, there are criteria to meet.<\/p>\n