♠ Posted by Marc J. Soss in 2015 Retirement Account Contributions,2015 Retirement Limits,2016 Retirement Account Contributions,Revocable Trust,Sarasota Tax Attorney,Sarasota Tax Lawyer at Tuesday, December 22, 2015
The crazy 2015 stock market offers
some excellent planning opportunities, if you qualify. While year-end has not brought the stock
market back to where it started the year, it opens the door to those interested
in making a Roth IRA conversion. Converting a traditional Individual Retirement
Account (IRA) to a Roth IRA would allow the assets to grow tax-free, while
remaining in your account, and tax-free distributions once you start withdrawing
funds.
There is no income limit or other
restrictions on who is eligible to convert a traditional retirement account to
a Roth IRA. The account owner will have to pay income taxes on the
account’s value on the date of conversion. However, the new investment
account will never again be subject to income taxes or required minimum
distributions. Considerations
that should be reviewed include (i) whether your income tax rate be
lower now, or during your future retirement years; and (ii) do you have funds
to pay the income taxes, other than the converted funds (if you’re under age 59
½ and use a portion of the IRA to pay the tax bill, the payment is treated as
an early distribution of the traditional IRA).
