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Sep 1, 2009 12:00 PM
Want To Convert To a Roth IRA?
In 2010, even the wealthy can have Roths. But before clients leap at the opportunity, review the pros, cons and mechanics. Oh, and know where the exit is
The year 2010 marks the first time that wealthy individuals will have easy access to a Roth IRA. Although they still won't be able to make contributions to a Roth IRA if their adjusted gross income (AGI) is too high, there will no longer be an income limitation to prevent them from converting a traditional IRA or other qualified retirement account into a Roth. A special provision defers the taxation of a 2010 Roth IRA conversion into the years 2011 and 2012.
Whereas a traditional retirement account is designed to defer the taxation of compensation income, a Roth IRA is the inverse: There is no income tax deduction for a deposit into a Roth IRA but the distribution, including the investment income earned in the account, is exempt from taxation.
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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