Taxpayers who converted a traditional IRA to a Roth IRA in 2010 are being reminded by the Internal Revenue Service to report half of the resulting taxable income on their 2012 returns.

Those who converted to a Roth IRA in 2010 should already be well aware of the changes that took effect January 1, 2010, which allowed for the conversion regardless of income and tax-filing status and postponed the tax bill for converting to be paid off over two years for that year only.

Normally, Roth conversions are taxable in the year the conversion occurs, but under a special rule that applied only to 2010 conversions, taxpayers generally include half the taxable amount in their income for 2011 and half for 2012, unless they chose to include all of it in income on their 2010 return. 

Roth conversions in 2010 from traditional IRAs are shown on 2012 Form 1040, Line 15b, or Form 1040A, Line 11b. Conversions from workplace retirement plans, including in-plan rollovers to designated Roth accounts, are reported on Form 1040, Line 16b, or Form 1040A, Line 12b. Taxpayers who made Roth conversions in 2012 or are planning to do so in 2013 or later years must file Form 8606 to report the conversion.