Convert a Traditional IRA to a Roth IRA

Some investors may benefit from the tax advantages of a Roth IRA. You may be eligible to convert a traditional IRA to a Roth IRA, but you will be subject to taxation for the fair market value of the amount you convert.

If You Do Not Yet Have a Heartland Funds Roth IRA

  1. Complete the IRA application form and select Roth IRA in section two
  2. Complete the IRA distribution form (pdf) and select convert my traditional IRA to a Roth IRA in section two
  3. Mail both forms to one of the following:

    U.S. Postal Service
    Heartland Funds
    P.O. Box 177
    Denver, CO 80201

    Overnight Service
    Heartland Funds
    c/o ALPS Fund Services
    1290 Broadway, Suite 1100
    Denver, CO 80203

If You Have an Existing Heartland Funds Roth IRA

  1. Complete the IRA distribution form (pdf) and select convert my traditional IRA to a Roth IRA in section two
  2. Mail the form to one of the following:

    U.S. Postal Service
    Heartland Funds
    P.O. Box 177
    Denver, CO 80201

    Overnight Service
    Heartland Funds
    c/o ALPS Fund Services
    1290 Broadway, Suite 1100
    Denver, CO 80203

Traditional vs. Roth Comparison

 

Traditional IRA

Roth IRA

Contributions

Tax-deductible, subject to income limitations

Not tax-deductible

Earnings

Tax-deferred earnings

Tax-free earnings

Annual Contribution Limits

2016: $5,500, $6,500 if 50 or older

2017: $5,500, $6,500 if 50 or older

2016: $5,500, $6,500 if 50 or older

2017: $5,500, $6,500 if 50 or older

Eligibility

Anyone under 70½ who has earned income

2016: Only individuals with adjusted gross income of less than $132,000 if filing as single, head of household, or married filing separately and did not live with a spouse at any time during the year; $194,000 if married and filing a joint return; $10,000 if married filing separately and you lived with your spouse at any time during the year

2017: Only individuals with adjusted gross income of less than $133,000 if filing as single, head of household, or married filing separately and did not live with a spouse at any time during the year; $196,000 if married and filing a joint return; $10,000 if married filing separately and you lived with your spouse at any time during the year

Federal Taxation on Withdrawals

Subject to income tax on earnings and deductible contributions

Distributions of contributions are tax-free and distributions of earnings are tax free if Roth IRA is held for at least five years and individual has reached age 59½; exceptions may exist if the distribution is due to death, disability, first-time home purchase, or post-secondary education

Distributions

Minimum distribution required after age 70½

None

 

Recharacterizing a Roth IRA Back to a Traditional IRA

Individuals who convert from a traditional IRA to a Roth are subject to taxation for the fair market value of the amount converted. Sometimes individuals may experience such a decline in value of their new Roth account that their account becomes worth less than what they paid in taxes.

If this is your experience, the IRS allows you to recharacterize the amount you converted back to a traditional IRA. Essentially, you are “undoing” your Roth conversion.

The recharacterization must be completed by October 15 of the year after you converted the account. You can then file an amended tax return to receive a refund of the taxes you paid on conversion.

Who to Contact with Questions

Contact the Shareholder Services Team at 800-432-7856, or send an email. The Team is available 8 a.m. to 7 p.m. CT, Monday to Friday.

Account Information

Heartland Funds Account Information Icon

©2017 Heartland Advisors | 789 N. Water Street, Suite 500, Milwaukee, WI 53202 | Business Office: 414-347-7777 | Financial Professionals: 888-505-5180 | Individual Investors: 800-432-7856

Neither Heartland nor any of its representatives may give legal or tax advice. For guidance on a specific situation, investors should consult their tax adviser or legal counsel.

The Heartland Funds are distributed by ALPS Distributors, Inc.

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