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Columns: Dr. Don
Don Taylor, Ph.D., CFA, CFP   Expert: Don Taylor, Ph.D., CFA, CFP
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The limit is the same no matter how many accounts
Ask Dr. Don

Multiple IRA accounts no problem

Dear Dr. Don,
Can you have two Roth IRAs? I currently have both a Roth and a traditional IRA. I only have $85 in the traditional. Can I convert it to a Roth? I don't really intend to contribute any more to it. I don't want to roll this over into my current Roth because it's invested in an annuity.

-- Chris Conversion

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Dear Chris,

You can have as many Roth IRA accounts as you like. You have to qualify to contribute to a Roth IRA, and new money contributions in any tax year are limited to the combined contribution limits for Roth and/or traditional IRAs, but the number of accounts isn't limited.

The conversion of the $85 from a traditional IRA to a Roth IRA is a bit problematic. The dollar amount is so small that it seems hard to justify the investment of your time. That's especially true if the Roth IRA account has an annual account fee. Here's what IRS Publication 590, "Individual Retirement Arrangements," states as minimum conditions for qualifying for the rollover:

Converting from any traditional IRA into a Roth IRA
You can convert amounts from a traditional IRA into a Roth IRA if, for the tax year you make the withdrawal from the traditional IRA, both of the following requirements are met:
Your modified AGI for Roth IRA purposes is not more than $100,000.
You are not a married individual filing a separate return.

There's more to it than just that, but Publication 590 spells out the details.

If you plan to keep funding Roth IRA accounts in this and future tax years then converting the traditional IRA to a Roth IRA can make sense. If the $85 is going to continue to hang out on its own, you could consider cashing in the account and paying the income and penalty taxes due. That's especially true if you're paying an annual account fee on the account.'s corrections policy-- Posted: Aug. 8, 2007
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