Whichever method you use, you will need to report the conversion to the IRS usingForm 8606: Nondeductible IRAswhen you file yourincome taxesfor the year.5 If the value of your retirement account has dropped, that could be a good time to convert to a Roth IRA because the tax impact will...
The second five-year rule determines whether the distribution of principal from the conversion of atraditional IRAor a traditional 401(k) to a Roth IRA is penalty-free. (Remember, you’re supposed to pay taxes when you convert from a pretax-funded account to the Roth.) As with contribution...
Five-year rule for Roth IRA conversions Similar to the rule above, withdrawals of money from the conversion of a traditional IRA or 401(k) to a Roth IRA are subject to a five-year waiting period to avoid a penalty. For this rule, the five-year period begins the first day of the tax...
This comment is the first time I found the individual conversion 5 year rule stated. All articles I’ve read treat conversions as a one time event, when for a large IRA, multiple conversions may be beneficial to avoid a higher tax bracket. Seems the individual 5 year rule should be ...
When you convert, you’re also risking that you may be in a lower tax bracket later, reducing the benefits of the conversion. A Roth conversion could also put you into a higher tax bracket, which would make the move significantly less appealing. That’s why it’s best to speak to a ...
1See IRS publication 590-B for details about the Roth IRA 5-year rule for contributions and the Roth conversion 5-year rule. See also IRC §408A(d)(2), §72(t), Treas. Reg. §1.408A-6. Need a retirement income strategy?
所以这里可以得出一个结论:Traditional IRA 在收入<= T1时,效果等同于Traditional 401K。 >T1时,等价于After Tax 401K。Roth IRA 在收入 < T' 时,等价于Roth 401K。(这里我们忽略取款要求,RMD,5-year rule,仅仅对存钱和收益增长进行划分。) [注1]: 年龄>59.5 且你任意的401K/IRA账户已满五年。
This is the best tax bracket for a Roth IRA conversion, advisors say Kate Dore, CFP®, EAFri, Dec 13th 2024 Biden-era retirement rule may be in jeopardy after Trump takes office Greg IacurciThu, Dec 5th 2024 Demand for Roth IRA conversions may increase under President-elect Donald Trump...
Although that might sound aggressive and unnecessary, there are many scenarios where a Roth IRA conversion can make sense. For example, let’s say you’re not earning a lot of money in a specific year and you want to convert to a Roth IRA while paying an extremely low tax rate. You co...
如果已经有传统的IRA，SEP-IRA或SIMPLEIRA，⽆论是哪⼀年开户的，或者从４０１ｋ等上班的地⽅转来的，都要算上，这些户头的钱你若不想转到Roth IRA，就不能使⽤Backdoor Roth的⽅法，因为IRS要求你⼀起转这⾥的户头才能享受税务好处。第⼆步：开⼀个non-deductibleIRA 这就是为什么可以绕开税法...