IRA Hopscotch: Consider These Strategies in Converting From a Traditional IRA to Roth

November 9, 2010 – In The News
Pittsburgh Post-Gazette

Due to recent shifts in tax laws, individuals may be considering converting a traditional IRA into a Roth IRA. Financial planners suggest that some of the tax law changes can be used to benefit savers’ portfolios. For example, anyone converting to a Roth IRA in 2010 has the option to either pay the income tax owed on the traditional IRA in 2010 or defer the tax until 2011 and 2012.

Susan Foreman Jordan said spreading the income over two years reduces the likelihood of the conversion pushing the taxpayer into a higher marginal bracket. “The taxpayer, of course, still has the option of including the entire amount in income for 2010,” said Jordan, “if he is concerned that tax rates will be significantly higher in 2011 and 2012.”

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