Question:
I am 83 years old with an IRA rollover account, regular IRA account and a small Roth IRA. If I convert a portion of either the rollover or regular IRA to a Roth IRA and die before 5 years after the conversion, is there any penalty to me or the beneficiaries? Also, can I convert to the existing Roth IRA or should I start a new Roth IRA? I do not plan to make any withdrawals from any Roth IRA. Does it make a difference from which IRA I convert funds?
Thank you for your response,
George
When visiting the doctor, does he or she ask foundational questions to help determine your medical condition? Of course. “How are you feeling?” “Are you a smoker?” “What hurts?” Does the doctor take some basic measurements – height, weight, blood pressure? Does he listen to your heart and lungs? Most assuredly.
The doctor is establishing an overall picture of health so as to make informed medical decisions. Without such elemental knowledge, how could a proper diagnosis be made? How could “next steps” be recommended with any confidence? It is not possible to provide appropriate care or guidance simply by looking at a person. Assumptions could be a death sentence.
Question:
I was wondering if, after a person leaves employment and they are sent a required minimum distribution (RMD) from their plan (sent as a check, taxes withheld), would it be considered a rollover if the ex-employee wants to open up an IRA on her own to put the money in within the 60-day timeline to avoid the taxes?
Thank you
Steve
I have self-directed traditional and Roth accounts at an SDIRA Custodian. Can I do a Roth conversion of an illiquid asset from the traditional to the Roth account? The investment I want to convert is a debt-only asset (no equity component) generating a fixed 8% dividend. It has a consistent FMV from year to year. I know I will pay tax on the conversion. I am 75 and retired.
Thank you,
As we enter tax season and consider last year’s transactions, it bears repeating: Roth IRA contributions can be recharacterized, Roth conversions cannot.
A Roth IRA contribution can be recharacterized (changed) to a Traditional IRA contribution. The opposite is also true. A Traditional IRA contribution can be recharacterized to a Roth contribution. This can be done for any reason. As long as the recharacterization is done by October 15th of the year after the contribution, it is a perfectly acceptable transaction in the eyes of the IRS.
Bob is 40 years old. He is a single tax filer, participates in a 401(k) at work, and makes a healthy annual salary of $160,000.
Bob has consistently contributed $5,000 each year to his Traditional IRA for 5 years ($25,000 total). However, Bob could not deduct any of the contributions because he has always been over the phase-out range for tax filers covered by a company retirement plan.
The end of 2020 is almost here. With the end of the year come certain retirement account deadlines. Here are 5 items you should have on your 2020 year-end retirement plan to-do list:
1. Do a 2020 conversion
If you are considering converting an IRA to a Roth IRA in 2020, time is quickly running out. The deadline for 2020 conversion is the end of the calendar year. There is a common misconception that a conversion can be done up until your tax-filing deadline.
Question:
I am 79 and still employed. My employer has an SEP for me and I have a Rollover IRA from a previous employer. Can I transfer my Rollover IRA to the SEP account?
Thank you,
George
Answer:
Hi George,
There are no restrictions in the tax law against combining a SEP IRA and traditional IRA that contains funds rolled over from an employer plan.
The clock is ticking if you are considering converting your Traditional IRA to a Roth IRA in 2020. More IRA owners are making this move this year as historically low tax rates and COVID-related income losses have combined to make this an ideal time to trade off the tax hit of a conversion for the promise of future tax-free Roth IRA earnings.
Thanksgiving is behind us, and the end of the year will be here soon. (Many of us are truly thankful for that!) This is a good time to remind you of certain tax breaks that will expire before we turn over the calendar to 2021. Many of these actions require cooperation from third-party IRA custodians and plan administrators, so you need to act fast. As that great philosopher Yogi Berra once said, “It gets late early out there.”
