Reply to Aargh, think I've totally screwed up...

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[quote=Anonymous]Are you saying that at some point you rolled over a regular IRA into a ROTH IRA without paying taxes on it at that time, or did this multiple times??

My best advice is to take the following steps:

1. Figure out what years you rolled over any regular IRAs into Roth IRAs.
2. Ignore the reverse - I don't think you would owe any additional taxes on ROTH-to-Regular conversions, or at least I don't know why you would since you'd be contributing after-tax dollars.
3. Take this to a reputable accountant (I have an accounting degree but am not an accountant) and file amended returns for the years where you identified making regular-to-ROTH conversions.

In each of those years, as long as it was legal that year to convert regular-to-ROTH, you should have paid additional taxes on those IRA balances as income. You might need to call the IRA as well and work with someone to try to get them to waive penalties since you're trying to correct an honest mistake. You should pay interest on those unpaid tax balances however - you've owed that money to our country since the mistake(s) happened.

In my opinion, that should make you legal.[/quote]

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