Archive for the ‘Roth Accounts’ Category

Backdoor Roth Contributions

February 14, 2015

Roth retirement accountsBackdoor Roth contributions provide a way for some people with income above the Roth IRA contribution limits to add dollars to a Roth IRA. We’ve added two new articles to our online guide to Roth Retirement Accounts, both based on material in our book Go Roth!:

Backdoor Roth IRA Contributions
Some people can use this technique to add to a Roth IRA even when their income is above the limit for Roth IRA contributions.

Possible Challenge to Backdoor Roth Contributions?
Some tax professionals have identified a risk in using this technique, but we believe there is no cause for concern.

New Roth Book Available

February 11, 2015

The 2015 edition of our book on Roth retirement accounts, Go Roth!, is now available. This update reflects changes in tax rates, legislation and IRS guidance through January 15, 2015.

more info  |  order from

Good Time to Think About Roth Conversion

January 14, 2015

Roth retirement accountsWe often think in terms of year-end tax planning, but there are some moves that can be especially advantageous early in the year. A Roth conversion is one of them.

details: Roth Conversion Early in the Year

Another Change in the Rollover Rules

November 13, 2014

We have further guidance from the IRS on another change in the rollover rules. This one has to do with the rule saying you have to wait a year after doing a 60-day rollover from one IRA to another before you do another. The IRS announced earlier this year that it would apply a stricter interpretation of the rule beginning in 2015. A November 2014 announcement clarifies the earlier guidance.

details: One Rollover Per Year

Big Change in the 401k Rollover Rules

September 23, 2014

We don’t often get a change this big in an area as important as 401k rollovers. The IRS released guidance completely revising the way we treat rollovers when your 401k or similar account includes after-tax dollars. Ed Slott, author of Ed Slott’s 2014 Retirement Decisions Guide, praised the guidance, saying, “The IRS has made it easier for many people to make their retirement savings more tax-efficient.”

What’s the big deal? Previously it was difficult to separate pre-tax dollars from after-tax dollars when taking money from an employer plan. Now it’s a snap, which means you can send pre-tax dollars to a traditional IRA for a tax-free rollover while sending after-tax dollars to a Roth IRA for a tax-free conversion. This is a big win for people with retirement savings. Use the link below for a full explanation

details: Isolating Basis for a Roth Conversion

Basis Isolation for Roth Conversions

March 26, 2013
By Kaye A. Thomas

We first posted on the topic of basis isolation for Roth conversions some four years ago, and we continue to receive inquiries on the topic. In response, we’ve upgraded our coverage. Previously we had a single article that described and critiqued the techniques that have been proposed. Now we offer a collection of seven articles dealing with different aspects of the topic.


IRS to Issue Guidance on In-Plan Conversions

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.

ATRA Expands Roth Conversions

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.


Roth Conversions Ahead of 2013 Tax Increases

September 20, 2012
By Kaye A. Thomas

High-income individuals have special reasons to consider Roth conversions before the end of 2012. They can benefit in two ways:

  • Scheduled increases in income tax rates could make it more expensive to convert to a Roth after 2012.
  • These same increases, together with other increases targeting investment income, could significantly enhance the post-conversion benefits.

This post is an excerpt from the new edition of our book Go Roth!, which is now available. Click here for details.


2010 Roth Conversions Prompt Erroneous Notices

June 19, 2012

Remember 2010? That was the year many people took advantage of the opportunity to convert a traditional retirement account to a Roth with a delayed tax cost. As reported by Amy Feldman for Reuters, it turns out that IRS computers didn’t get the message in all cases. Due to a glitch in the way they talked to one or more  electronic filing software systems, they aren’t connecting the dots on some of the returns: they see the money coming out of the traditional account, but not the Roth conversion that allows a delay in reporting that income. Result: a message from the IRS saying you owe additional taxes on your 2010 return. No need to panic if you receive this unwelcome message. Just make sure you respond promptly, enclosing a copy of the Form 8606 that was part of your 2010 return (or have your tax pro do this for you).

Good reading: If you like, you’ll also like Amy Feldman’s twice-monthly tax column for Reuters.

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