Is it time for ROTH IRA conversion?

Is it time for ROTH IRA conversion?

We’ve often discussed the possibility of converting a portion of your traditional IRA to a ROTH. The process involves moving some or all of your traditional IRA to a ROTH IRA account and reporting that value on your tax return for that year. Note: once done, there’s no changing your mind as was the case before the law changed several years ago. Here are some of the conditions/situations that might make a ROTH conversion advantageous for you:

1. You have an IRA holding with large losses this year.
2. You are currently in a lower tax bracket than when you will ultimately need the distributions or be required to take distributions at age 72.
3. You are currently under-employed and earning much less than normal temporarily.
4. You have cash reserves needed to pay the tax due since ROTH conversions are added to your tax return.
5. You are planning to move this year in time to be a resident of a like Florida with no income taxes.*  Speak to your tax preparer about the requirements.
6. You have a large tax loss or deduction that can be used to reduce your taxes in the year of the conversion.

The markets are down but don’t be sour. Let’s make lemons into lemonade!!  Contact  us immediately to see if you’re a candidate.