A Roth conversion occurs when you move assets from a traditional IRA to a Roth IRA. Changes to tax laws now allow for investors of all income levels to implement a conversion. Converting a traditional IRA to a Roth IRA can be appealing for some investors because:. In addition to traditional IRAs, accounts in qualified employer plans such as k s, b s, or governmental b s that are eligible to be rolled over may be converted a Roth IRAs.

To withdraw tax-free earnings, the Roth IRA must have been open for a minimum of five years and meet one of these criteria:. Yes, any previously tax-deferred assets converted such as a traditional IRA or a traditional employer plan will be taxable as income.

A conversion of after-tax amounts such as a nondeductible contribution to a traditional IRA will not be subject to income tax. To help manage your tax liability, you may choose to convert just a portion of your assets. There is no limit to the number of conversions you can do, so you may convert smaller amounts over several years. If you are an existing Wells Fargo Funds client and wish to complete a conversion, please complete and mail in the following forms:.

Any tax or legal information on this website is merely a summary of our understanding and interpretations of some of the current income tax regulations and is not exhaustive.

Investors should consult their tax advisor or legal counsel for advice and information concerning their particular situation. Wells Fargo Funds Management, LLC; Wells Fargo Funds Distributor, LLC ; or any of their representatives may not give legal or tax advice.

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Roth IRA Conversion Analyzer

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Beginning of content Converting to a Roth IRA Converting to a Roth IRA Menu Overview FAQs. What is a Roth conversion? Why convert to a Roth IRA?

Converting a traditional IRA to a Roth IRA can be appealing for some investors because: This can help retirees gain more control over their investment withdrawals. Roth IRA withdrawals are tax-free, which can provide tax diversification in retirement. Roth IRAs can be passed on tax-free to heirs, making it an appealing estate-planning tool. A Roth IRA conversion may make sense if: You estimate being in a similar or higher tax bracket in retirement. Your assets have not grown significantly and the tax on their growth would be minimal.

You can pay the conversion taxes without using the retirement funds themselves. You do not expect to use the funds for retirement and wish to transfer them to your heirs.

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What type of retirement accounts can I convert to a Roth? When am I eligible for tax-free withdrawals?

To withdraw tax-free earnings, the Roth IRA must have been open for a minimum of five years and meet one of these criteria: Do I need to convert all my assets at one time? If you are an existing Wells Fargo Funds client and wish to complete a conversion, please complete and mail in the following forms: An IRA Application to open a new Roth IRA account unless you already have a Roth account established Roth IRA Conversion form Do you have questions about a Roth conversion?

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