Spencer Accounting Group, LLC - Tax Planning and Preparation Services - West Allis, Milwaukee, Brookfield, Waukesha, United States and Saudi Arabia
  • Home
  • Pricing
    • Rush & Cancellation Policy
  • Let's Chat
  • Home
  • Pricing
    • Rush & Cancellation Policy
  • Let's Chat

FREE Tax Tips and Updates

Browse our blog for helpful tax planning and preparation information.

IRA ROTH CONVERSION

1/8/2017

0 Comments

 
Picture

Things to Consider

If you are thinking of converting your traditional IRA into a Roth IRA, it is imperative that you to consider the possible changes to the tax code that could be coming after the inauguration.  To convert your regular IRA into a Roth, you will have to pay income tax on the amount of the account that reflects any deductible contributions you made to the IRA as well as any untaxed earnings in the account.  If you are in a high tax bracket now, it may make sense to wait until retirement age to withdraw your funds from a traditional IRA when your tax rate is likely to be lower.  On the other hand, with the Republicans taking over the House and the Senate, we may see the Bush tax cuts return, where tax rates for Upper-income taxpayers were at an all-time low. 
 
The benefits to converting to a Roth IRA is that you will not have to pay tax on withdrawals later when you begin receiving distributions.  Also, the earnings on your Roth IRA will never be taxed if you hold a Roth IRA for 5 years and you delay receiving distributions until you are age 59 ½.  Roth IRA are more liquid than traditional IRAs, because you can withdraw rollover IRA contribution within 5 years after moving them into a Roth without a penalty.  This translate to better access to savings without penalty while you still retain some of the benefits of a tax-qualified retirement plan. 
​

Even though Donald Trump has won the Presidency and the Republicans will take over Congress, it will take time for any longer-term tax reform plan with lower individual tax rates to be put in place.  With that being said it may be advantageous to wait to convert. The rules are complex though, and it is important to get the strategy right, depending on your individual financial goals.  I will be glad to help you decided whether making a Roth rollover before the end of the year would be right for you.
 
​
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    We're Here to Help

    Get advice from our experienced network of financial managers. 
    ​

    If you Value our Blog, We have an ask.

    We spend hours researching data to help you understand your finances and taxes, including historical context, issues, and solutions. Our goal is to empower people to improve  their relationship with money. ​Please consider a $3 donation today.

    Tax Plan Video

    Important Disclosures


    Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

    ​
    To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
    ​
    These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

    GET STARTED

    Author

    Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion.  Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

    Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

    RSS Feed

    Accounting Services
    Tax Preparation
    Picture
    Picture
Home
Net30 Account Info
Privacy Policy
Contact Us

Picture
Picture
Picture
Copyright 2021 ALL RIGHTS RESERVED.
Photo used under Creative Commons from verchmarco