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pro-rata rule

Roth Conversion, Pro-Rata Rule, and Rollovers: Today’s Q&A Mailbag

This week's Slott Report Mailbag answers readers' questions about Roth conversions, the pro-rata rule, and rollovers.

Understanding the Pro-Rata Rule

The pro-rata rule is an important, though commonly misunderstood, rule that affects the taxation of IRA money. It only comes into play when your traditional IRA consists of both pre-tax and after-tax monies. These after-tax dollars can come from non-deductible IRA contributions or rollovers of after-tax funds from employer plans. Either way, once those monies are in the account, subsequent distributions or conversions are subject to the pro-rata rule. The pro-rata rule does not apply to Roth IRA assets. Instead, Roth IRA distributions are subject to their own set of ordering rules.

Taxes Can Be Hefty If You Make These Rollover Mistakes

This week's Slott Report Mailbag looks into taking RMDs from multiple accounts, 60-day rollovers and the once-per-year rollover rule.

Do You Know When the Pro-Rata Rule Applies? This Week’s Q&A Mailbag

This week's Slott Report Mailbag looks into direct rollovers, Notice 2014-54, the pro-rata rule and NUAs.

Exceptions to the Pro-Rata Rule for IRA Distributions

Have you ever made non-deductible IRA contributions? Or, rolled over after-tax funds from your company plan to your IRA? If so, you will want to know about the pro-rata rule. The pro-rata rule is a rule that almost always determines the taxation of an IRA distribution when the IRA owner has any IRA containing after-tax amounts. However, some IRA distributions are not subject to the pro-rata rule. These exceptions may provide an opportunity for you to lower the tax bill that comes with an IRA distribution or conversion.

5 Reasons Why Millennials Should Go with a Roth IRA

If you are a young worker, you, like many other members of the millennial generation, may be juggling student loans and expensive rent. Retirement? That is likely the last thing on your mind, although you may have a sneaking suspicion that the generous pensions that older generations enjoy probably will not be there for you. What can you do now to save for a more secure retirement? Well, for many millennials the Roth IRA is the way to go. Here are 5 reasons why.

Is the Back-Door Roth IRA Strategy Still Viable?

This week's Slott Report Mailbag answers a college student's question on qualifying income for a Roth IRA contribution and discusses the still viable "back-door Roth" strategy.

I'm Over the Contribution Income Limit - Can I Still Get Money Into a Roth IRA?

This week's Slott Report Mailbag looks at the complications involved with pre- and after-tax contributions to different retirement plans and the rules involved with conversions and distributions.

Will I Pay Tax When I Convert to AND Distribute Funds from a Roth IRA?

It's time for another edition of The Slott Report Mailbag, where we answer consumer questions on situations involving Roth conversions and the pro-rata rule, whether you need earned income to contribute to a Roth IRA and certain Roth IRA tax scenarios (reminder: Tax Day is Monday!)

Can I Convert Funds From an IRA to a Roth IRA Before Age 59 1/2?

It's time for another edition of The Slott Report Mailbag, where we answer a parent's question on whether her son's Roth IRA contributions were done within the rules, assess whether an IRA account can be converted to a Roth IRA before age 59 ½ and examine an employee's pro-rata complexities with moving after-tax 401(k) funds to both a traditional and Roth IRA.

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