Traditional IRA - Roth Conversions

[tractor]

I converted $30,000 from my traditional IRA over to a Roth in 2010. I shouldn't be confused on this, but I am. From what I can tell, I do not need to report this as income on my 2010 taxes, but can report half in 2011 and half in 2012. Is this right, I basically ignore it for 2010 taxes? Is there an easy way to figure out what makes more sense for me, either to pay it all in 2010, or spread it out over two years? Our AGI is $120,000. Thanks.

[mwcpa]

"there an easy way to figure out what makes more sense for me, either to pay it all in 2010, or spread it out over two years"

If you expect your income to be the same (or similar) in 2011 and 2012 (tax rates will be) then do a make believe return...

if you are a do it yourselfer, then in your turbo tax (or equivalent),
run the 2010 without the rollover
run it with the rollover
see the increase in tax

now, run it with 1/2 the amount
compare that result with the no rollover amount
double the difference

compare the two results...what is the higher tax....

if you use a pro, ask for their help...

[tractor]

Thanks. I use turbotax, but haven't figured out how to factor in the rollover yet. I'll dig around some more and see what I can come up with. I expect our income to be about the same for a few years yet, as long as teh tax rates remain relatively stable, I will probably spread it over two years.