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The Slott Report

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.

This Week's Q&A Mailbag: Roth IRA Contributions and Distributions

This week's Q&A Mailbag answers reader questions on Roth IRA contributions and distributions.

IRS Releases Modified Inflation Adjusted Items

The Tax Cuts and Jobs Act revised the way inflation adjusted numbers will be calculated by IRS. The Act now mandates that these numbers be calculated using chained CPI. IRS has gone back and recalculated inflation adjusted amounts for use in 2018.

5 Roth IRA Facts That May Surprise You

Do you think you understand all the rules that govern your Roth IRA? Not so fast! There are many misconceptions as to how these complicated accounts work. Here are 5 Roth IRA facts that might surprise you.

This Week's Q&A Mailbag: SEP contributions, RMDs, and Inherited IRAs

This week's Q&A Mailbag answers reader questions on SEP contributions, RMDs, and Inherited IRAs.

Bitcoin as an IRA Investment: 6 Things to Know

Bitcoin is receiving a surge of publicity as a possible IRA investment, and a number of new firms have recently started targeting the "Bitcoin IRA" market. Read about six things to know when investing IRA funds in Bitcoin.

Using the Disclaimer as an Estate Planning Tool

If you’re like me, when you first read the qualified disclaimer rules, the phrase comes “must be nice” comes to mind. And while it’s true these rules are used more often by wealthier Americans, anyone can incorporate them into their estate planning as a tool to make last minute changes. In fact, disclaimers can be a valuable postmortem planning tool giving beneficiaries one last opportunity to divert a bequest to accomplish family goals, such as tax savings.

Still-Working Exception and Indirect Transfers: Today’s Q&A Mailbag

This week's Slott Report Mailbag answers readers' questions about the still-working exception and indirect transfers.

What Retirement Documents Do You Need to File Your 2017 Tax Return?

There are certain events that will require the filing of special forms or tax documents when you file your income tax return. If you have received a distribution from any retirement account, real or deemed, during the year, or if you have done a Roth IRA conversion - even if you did a total recharacterization - or if you have incurred a penalty or additional taxes in a retirement account during the year, you will have to tell IRS about any of these events.

Is 2018 the Year for Your Roth IRA Conversion?

Roth IRAs have been around for 20 years now. Lots of taxpayers have taken advantage of the tax-free benefits of these accounts by converting their traditional IRAs or employer plans to Roth IRAs. But many have hesitated. Maybe you are among those who held back. The year 2018 may be the year to change your mind.

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