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Congress is going after the largest IRAs
Congress has set its sights on mega-IRA balances, in large part due to the recent reports about Peter Thiel’s $5 billion Roth IRA. But some of these proposals will impact many other clients with smaller individual retirement accounts and Roth IRAs.
Retirement Savers Love the Backdoor Roth IRA Strategy. It Might Not Last.
Many Americans are using a previously little-known tax method to boost their savings. Now, the government is trying to stop it.
The tax strategy at issue is the mega-backdoor Roth conversion and it has allowed some Americans to amass sizable balances in tax-free Roth retirement accounts. On Sept. 15, the House Ways and Means Committee approved legislation from House Democrats that would prohibit use of the mega-backdoor Roth conversion starting Jan. 1, 2022.
Democrats Want to Raise Taxes. Here’s Your To-Do List.
This week Democrats on the House Ways and Means Committee voted to advance dozens of proposed tax changes. Some are tax increases that would raise more than $2 trillion of revenue to help fund the party’s priorities.
Ed Slott Urges Advisors To Act Before Tax Hammer Strikes
Also proposed is an outright ban on the “mega backdoor Roth” conversion using workplace retirement plans, which allowed high-income Americans to put $58,000 into a Roth account this year. If passed, that proposal would be effective next year.
Ed Slott Weighs In on House Democrats' Proposed Mega-IRA Crackdown
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.”
How Stretch IRA Tactics Have Tightened
Christine Benz: Hi, I'm Christine Benz from Morningstar. The Secure Act ushered in new rules for inherited IRAs. Joining me to discuss what you need to know about that is author and tax-planning expert Ed Slott.
How a Client's Solo 401(k) Can Become a Mega Backdoor Roth IRA
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.
How The 'Backdoor Roth IRA' Can Benefit Some High-Income Clients
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.
Mega Qualified Charitable Distributions: Now or Never
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.