Since the release of IRS Notice 2014-54 on September 18, 2014, there has been some confusion over whether the rules in that Notice apply to converting IRA funds to a Roth IRA. Notice 2014-54 provides favorable guidance for people with after-tax money in their company retirement plan, such as a 401(k). As a result of the Notice, if you have after-tax funds (basis) in your company plan, you may be able to convert some of your retirement savings to a Roth IRA tax-free.
Moments ago the IRS released new guidance – IRS Notice 2014-54 – regarding distributions from company retirement plans when there are both pre and post-tax money in those accounts. For years now, one question has plagued both plan participants and financial advisors alike… “If someone has a 401(k) with pre and post-tax money, can they take a distribution and roll (convert) just the post-tax money to a Roth IRA tax-free, while rolling the remaining pre-tax money over to a traditional IRA?” What's the answer now?
This week's
Slott Report Mailbag looks at how many times you should convert funds from the same Roth IRA and if a fee to close an IRA account is considered a distribution for tax purposes.
As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. You can find one in your area here.1.I'm moving my traditional IRA to another company and will be charged $100 to close the account. Will that $100 be considered a distribution for tax purposes? Can I send a check for $100 to the new company so the full amount is transferred?
You want to make a contribution to a Roth IRA for 2014.
As long as you’re working and have compensation (earned income) you can potentially make a Roth IRA contribution of up to $5,500 if you’re under age 50 or $6,500 if you’re age 50 or older this year.
We end Roth Conversion Week with a list you never want to be on. Roth conversions are powerful, tax-free retirement vehicles if handled correctly, but if a mistake is made, you may owe a good portion of your hard-earned savings to taxes and penalties. Here's a list of the Top 10 Roth IRA (and conversion) mistakes you must avoid.
One of the most common Roth IRA questions I'm asked is, "Should I make a Roth conversion?" While Roth conversions can make sense at any age, depending on your particular circumstances, generally speaking, the younger you are, the more it makes sense. In this article we go over 3 reasons to wait until you retire to make a Roth conversion.
This week's
Slott Report Mailbag focuses on a SEP IRA conversion to a Roth IRA. It's an interesting question (one we don't get often), so we decided to put a spotlight on the issue in this week's mailbag. Click to read a Q&A with our IRA Technical Expert.
You can't just contribute to an IRA if you have extra money lying around and don't work. It's a fact that many Americans aren't aware of, and it's one that came up in this week's
Slott Report Mailbag. We also examine the ability to recharacterize part of a Roth conversion more than once and the process for establishing IRA annuities.
It's tax time - and we've covered a lot of key planning issues during our Tax Planning Week. Here are some responses to other key IRA questions that come up a lot at tax time.
This week's Slott Report Mailbag includes information on opening non-deductible IRAs for the purpose of a backdoor Roth IRA, 401(k) beneficiary issues and if RMDs (required minimum distributions) can be converted to a Roth IRA.
