News & Press
House Ways and Means Committee Chairman Richard Neal’s plan to usher in several changes to individual retirement accounts “will not likely see much pushback because most people will never have to worry about their IRA balances exceeding $20 million,” IRA and tax specialist Ed Slott of Ed Slott & Co. told ThinkAdvisor late Monday in an email. “And the few who do will easily move on to the next workaround that Congress has not yet thought of.”
Solo 401(k)s — in addition to company 401(k)s — can help clients save additional retirement money on an after-tax basis, even with the possibility of converting them to mega backdoor Roth IRAs, but there are rules, according to Ian Berger, an IRA analyst with Ed Slott & Co.
Say you started with $40,000 in before-tax contributions to non-Roth IRAs and another $10,000 in after-tax contributions to other non-Roth IRAs. That means 80% of your total non-Roth IRA accounts were made with pre-tax dollars. So 80% of whatever amount you convert to a Roth IRA will be taxed (at normal income tax rates), no matter which IRA it came from.
Christine Benz: Hi, I'm Christine Benz from Morningstar. For charitably inclined older adults, a qualified charitable distribution often beats making a charitable contribution and deducting it on your tax return. Joining me to discuss the QCD, as well as what he calls the mega QCD, is author and tax-planning expert Ed Slott.