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Submitted By: someone
Answered: January 20, 2020 9:26 pm
Answered: January 20, 2020 9:26 pm
If I convert my traditional IRA to a Roth IRA, does this create earned income?
No. The conversion triggers taxable income (the full amount of what’s in the traditional IRA if no nondeductible contributions were ever made). But the mere fact that the original contributions were based on earned income does not make the conversion income into earned income.
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Tax Glossary
Foreign tax credit
A credit for income taxes paid to a foreign country or U.S. possession. 401(k) plan. A deferred pay plan, authorized by Section 401(k) of the Internal Revenue Code, under which a percentage of an employee’s salary is withheld and placed in a savings account or the company’s profit-sharing plan. Income accumulates on the deferred amount until withdrawn by the employee at age 59?
