<p>Hello All,</p>
<p>I and my wife are considering converting our IRA's to Roth IRA's in 2010. We have been fortunate to receive need based aid for three of our four children attending private universities. We still have four more years of college to go.</p>
<p>Do you think this will impact financial aid in any of the three years we spread out the tax bite.</p>
<p>Thanks for any responses.</p>
<p>Marty</p>
<p>It could. When you convert an IRA to a Roth the sale of the IRA is reported and taxed as income so will increase your AGI on your tax return, which is the income # FAFSA uses. It would increase your FAFSA EFC. This is something you can ask for a special circumstances adjustment for. But special circumstance adjustments are up to the discretion of the FA officer so there are no guarantees. </p>
<p>And for a private university it would also depend on their own policies.</p>
<p>Thanks swimcatsmom,</p>
<p>I think I need to contact the FA office and see what they have to say. I’m sure they’ve seen this before.</p>
<p>Marty</p>
<p>I’m going to convert mine in 2010. From what I have read, the tax bill will be spread over 2 years, 2011 and 2012. It doesn’t appear that any will be on the 2010 return.</p>
<p>I thought it would be the three years. Have to check.</p>
<p>Thanks,</p>
<p>Marty</p>