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You can continue contributing to a Roth for as long as you live and you never have to take a single distribution. By contrast, you must stop putting money in a traditional IRA and start taking distributions from the account at age 70 1/2. Consequently, some taxpayers choose to roll traditional IRA or other retirement plan assets into a Roth IRA. This action has no effect on eligibility to make regular Roth contributions.
IRA Yearly Contribution Limit
The Internal Revenue Service sets the IRA yearly contribution limit. As of 2012, the limit is $5,000, or $6,000 for those 50 and over. The limit is per individual. No matter how many IRAs you own, you cannot contribute more than the annual limit. For example, if you have two Roth accounts and one traditional IRA, you can put $500 in one, $3,000 in another and $1,500 in the third in 2012. The 2013 limit will be $5,500 for those under 50 and $6,500 for those age 50 and above. These limits are subject to your income (you can't contribute more than your earned income, and if you earn too much income your ability to contribute to a Roth IRA is reduced or eliminated entirely).
Rollover Has No Impact
A rollover is considered an entirely different action from a contribution. Thus, the amount of a rollover has no impact on the contribution limit for the year. If you roll $100,000 from a traditional IRA to a Roth in 2013, you can still contribute $5,500, or $6,500 if you are 50 or older, to the Roth.
Your rollovers are reported to the IRS separately from your regular contributions. On Form 1099-G, which the IRA trustee mails to you in January or February, you can find your contribution amount in one box and your rollover amount in another. Distribution amounts are also reported on the same form.
Rollover Added to Income
If your rollover is taxable, you add it to your income when you file your return. For example, if you roll $100,000 from a traditional IRA to a Roth, your income will be increased by $100,000 for that year. This might push you into a higher tax bracket, making some of the conversion taxable at a higher rate, but it will not affect your modified adjusted gross income for purposes of contributing to a Roth IRA. At any rate, you include the amount in the income section on page 1 of IRS Form 1040.
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