Business & Finance

TIMELY TAX TIPS: To Convert or Not Convert to a Roth IRA in 5 Easy Steps

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Credits: www.wfp-taxes.com
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Credits: wfp
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BASKING RIDGE, NJ -  Are you considering converting your IRA or employer plan assets to a Roth IRA?

You may be searching for ways to reduce your tax bill in retirement, and a Roth IRA can do just that. However, before you make any moves with your money, there are other tax implications you should consider first.

One of the biggest questions you must answer before converting to a Roth IRA is how you will pay for the taxes that will be due when the conversion is executed. When converting to a Roth IRA, you will trigger a taxable event, so your ability to pay that tax with outside money should be a large factor in your decision.

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Click here to download “To Convert or NOT To Convert in 5 Easy Steps”pdf

The first question is: When will you need the money? If you have an immediate need for the funds or need them to continue your current standard of living, then a Roth IRA conversion is probably not for you. Another question to consider is where the money would come from to pay the resulting tax. In nearly all cases, the money to pay the tax on a Roth IRA conversion should come from outside (non-retirement account) funds in order for the conversion to make sense. 

Drill down with further questions and details to consider in "To Convert or NOT to Convert in 5 Easy Steps."

For professional assistance with your Roth IRA conversion, or if you need help preparing your 2016 Tax return, contact Walter Pardo of WFP Tax Partners at our Basking Ridge office at (877) 714-2362 

 

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