Special Roth IRA tax rule for 2010 only

[SacDuc]

I found out the other day that during 2010 you can convert assets (Simple IRAs, 401k, etc.) to a Roth IRA and the tax penalty will be deferred. You will pay half of it in the tax year of 2011 and half in 2012.

My wife and I have some money scattered around in various 401Ks and IRAs from various employment stints and will be consolidating all of that stuff into a Roth. We have a very low tax burden due to a large amount of mortgage interest and my wife's ability to write off a bunch of stuff through her business. So we plan on trying to eat the tax during 2011/12 and keep our overall investment amount the same. The difference being that, undre the Roth rules, when we start to collect all of our withdrawls after the age of 59 1/2 will be tax free.

So, if you are young enough and if you foresee a low tax burden for the next couple of years this is a great chance to keep from paying taxes on the profits from your retirement investments.

sac

/limited time offer!
//talk to your accountant and financial planner today!   

[Monsterlover]

Im gonna