The buzz about Roth IRA conversions is getting louder. And why not? Beginning in 2010, the IRS eliminated the prior restriction that disallowed conversions for taxpayers with an adjusted gross income (AGI) above $100,000. Also, you can split the taxable income triggered by a 2010 Roth conversion evenly over 2011 and 2012. (You report 50% of the income in each of those years.)
But should you convert to a Roth? That’s another story.
Strategy: Crunch all the numbers. Don’t assume that a conversion is right for you just because you can do it for the first time. Also, if it makes sense, you might convert only part of your traditional IRA assets and leave the rest alone.
What’s in the pot at the end of the rainbow? Qualified distributions from a Roth (e.g., distributions after age 59½ and after having a Roth IRA in existence for more than five years) are federal-income-tax-free. Plus, you’re not required to take minimum di...(register to read more)
- Small Business Tax Deduction Strategies No matches