Have You Thought About a Roth Conversion?

With the stock market appearing to head towards a–dare I say it–recession, now might seem like an odd time to talk about converting your traditional IRA to a Roth IRA. However, converting when the markets are low actually might be the best time to do so. When it comes to Roth IRA conversions, the tax bill for doing so is based on the value of your traditional IRA assets. Thus, when the markets are down, there’s a really good chance your IRA assets are down too, which means a lower tax number. As for the actual tax hit, as you Continue reading Have You Thought About a Roth Conversion?

Understanding Roth IRA Conversions Within Your Taxes

Yesterday I talked about how the IRS tracks required minimum distributions (RMDs) and makes sure that they are properly taxed. Today, I am going to talk about how to report a Roth IRA conversion on your taxes. Reporting a Roth IRA conversion involves taking information off your Form 1099-R, but it also requires filing another form and some further calculations. You first will want to locate the conversion amount on your 1099-R, but you will also have to file a Form 8606 to report the conversion and calculate the amount tax on the converted money. The good news about the Continue reading Understanding Roth IRA Conversions Within Your Taxes