Roth IRA
Conversions - Planning for New Opportunities
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A tax change effective for
2010 repeals the income limits for conversions to a Roth IRA.
Therefore, regardless of your filing status or how much you earn, you
are eligible to convert a traditional IRA to a Roth IRA and thereby
obtain the extremely beneficial tax benefits associated with it.
Generally, your IRA
rollover will be reported as taxable income. However, special
rules will allow a two year deferral of the tax to 2011 and 2012.
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Is a Roth conversion right for
you?
The answer to this question depends on
many factors, including your income tax rate, the length of time you
can leave the funds in the Roth IRA, state tax laws and how you'll pay
the income taxes due at the time of the conversion. However, a
safe harbor allows you to "undo" a conversion that turns out
to be disadvantageous (within certain time limits).
Some tax experts are suggesting
that everyone with a traditional IRA rollover their assets this
year! We certainly think that everyone needs to at least consider
the option.
The financial professionals at B&C Planning Services can
help you decide whether a Roth conversion is right for you, and help
you plan for this exciting new retirement savings opportunity. We
are offering a FREE simplified rollover analysis to all Bowers & Company
CPA's, PLLC tax clients. Please call your Bower's contact if you
would like an analysis completed.
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