The ink on the tax bill is now DRY. And there is reprieve. But, what should you be doing over the next two years? Find out what the tax experts advise…
The ink on the tax bill is now DRY. And there is reprieve. But, what should you be doing over the next two years? Find out what the tax experts advise…
I heard something about converting a traditional IRA to a Roth IRA and how it would be a better way to pass an IRA on to one’s children?
Traditional IRAs are taxable instruments of which when you pass to your children, you are passing the tax ramifications as well to them. In other words, if you have a traditional IRA with $400,000, when you turn 70, you have to start taking out a minimum required distribution. All that is considered taxable income.
The issue then becomes, what are my opportunities? We now have something called a Roth IRA, in 2010, there is an opportunity for people to roll their money from a traditional IRA to a Roth IRA. The difference is that with a Roth IRA, the withdrawals are totally tax free. Once you have transferred it out of a traditional IRA to a Roth IRA, your children can inherit this without any tax consequences.