February 11, 2015
January 29, 2013
Speaking at a meeting of the Tax Section of the American Bar Association, a Treasury official said there is a plan to issue guidance concerning in-plan Roth conversions. As reported here earlier, the American Taxpayer Relief Act of 2012 expanded the availability of these transactions, which move assets from a traditional 401k or similar account to a designated Roth account within the same plan. The timing for this guidance has not yet been determined but the goal is to have it out by mid-year.
January 3, 2013
By Kaye A. Thomas
In a last gasp effort Congress passed legislation to avert the fiscal cliff and prevent tax increases on 98% of Americans. Key features of the American Taxpayer Relief Act of 2012 (“ATRA”) include the following:
January 3, 2013
Our book Go Roth! lists eight ways the availability of Roth retirement accounts has increased since 2005. The American Taxpayer Relief Act of 2012 (“ATRA”) adds another. Beginning in 2013, if permitted by your employer’s plan, you can convert an existing 401k, 403b or 457b account to a Roth account, even if you aren’t eligible to take a distribution.
November 27, 2010
The IRS has released a 12-page notice (PDF) providing guidance in question-and-answer form for employers that want to offer their 401k or 403b participants the opportunity to move money from a regular account to a designated Roth account within the same plan. This guidance was on a fast track so that employers could make this opportunity available before the end of 2010 for those participants who want to take advantage of the special rule, available only this year, to delay the reporting of income from a conversion — splitting it between 2011 and 2012 instead of reporting it as 2010 income. (more…)
September 24, 2010
As of September 27, 2010, employees with 401k or 403b accounts can do a Roth conversion without taking money out of the plan — but only if the employer takes steps necessary to permit these conversions. Here are questions and answers about these provisions. (more…)
August 23, 2010
News reports indicate a record number of people are taking hardship withdrawals from their 401k accounts. As the name suggests, the rules permitting these withdrawals are intended to provide a measure of relief from economic hardship. In most cases, though, people taking these withdrawals will end up suffering more hardship, not less. (more…)
June 30, 2010
Action in the Senate June 29 may result in expanded access to Roth accounts. One provision would take effect upon enactment, which is on a fast track. Before it can become law, the provision must be approved by the House of Representatives. (more…)
May 20, 2010
Forbes quotes us in an article about converting from a traditional 401k account to a Roth IRA. In case you came here from that article looking for our piece discussing strategies available for isolating basis in a 401k conversion, that would be right here.
May 20, 2010
The Pension Protection Act of 2006 added rules requiring 401k plans (and certain others) to give participants an opportunity to change from an investment in stock of the company where they work to a diversified investment. Generally you have this right from day one for your own contributions to the plan, and the plan must permit this for company contributions when you’ve completed three years of service. Final regulations (PDF) have been issued providing details that may be of interest to plan designers and administrators. Changes from the proposed regulations are relatively minor but may be helpful, including a clarification that reinvestment of dividends on employer stock won’t create a violation of the rules.
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