June 2010
Simple Steps For Roth IRA Conversions
Eligibility limitations for converting from a TSA, Pension or Traditional IRA to a Roth IRA were lifted beginning January 1, 2010. Even though this conversion is a taxable event for the policyowner, some may see a benefit and wish to request this option. In addition, for conversions occurring in the 2010 tax year only, any amounts that would be included as income can be included in income in equal amounts in 2011 and 2012 rather than all at once, making a conversion more desirable in this tax year.
Steps for Conversion:
- The policyowner should complete a distribution transfer form by marking that they wish to rollover to a Roth IRA.
- The policyowner must also submit a substitute form W-4P and W-9.
- The Standard will report the conversion on a Form 1099R in the year that the process is completed.
- We will send a copy of the Roth IRA rider to the policy owner to add to their original contract.
The Standard is prepared for any of our policy owners wishing to convert their current policy to a Roth IRA. A policy converted to a Roth IRA will retain the same annuity contract and policy number. The conversion will not affect the types of benefits available and will not restart the surrender charge schedule.
Just contact the Individual Annuities Administration team with any questions. We're ready to help!