Are Taxes Going Up

Saturday, February 7, 2009

CBS 60 MINUTES: ARE TAX RATES GOING UP?
Anyone who thinks their tax rates will be higher in the future should consider converting to a Roth IRA.
Anyone who thinks they won't should watch this this 60 MINUTES segment that aired March 4, 2007From CBSnews.com:As correspondent Steve Kroft first reported earlier this year, he is the nation's top accountant, the comptroller general of the United States. He's totaled up our government's income, liabilities, and future obligations and concluded that our current standard of living is unsustainable unless some drastic action is taken. And he's not alone. It's been called the "dirty little secret everyone in Washington knows" – a set of financial truths so inconvenient that most elected officials don't even want to talk about them, which is exactly why David Walker does.Click this link to go CBSnews.com where you can watch this 60 MINUTES segment
http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml
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Retire Without Taxes

Friday, February 13, 2009

COVER STORY
RETIRE WITHOUT TAXES
Suppose you could earn tax-free returns on your retirement savings. Suppose you could collect tax-free income after you quit working — and even pass along these tax-free payouts to your heirs. You'd jump at that trifecta, right? Then why haven't you? With a Roth IRA and its workplace counterpart, the Roth 401(k), you can get all three valuable benefits in one investment. But what's holding you back could be confusion. Roths present you with a minefield of eligibility requirements, tricky tax twists and arcane withdrawal rules. That's where MONEY's guide comes in. Their 12 questions and answers will tell you everything you need to know to make a Roth the cornerstone of a rich, secure retirement.

To Convert or Not to Convert - ROTH IRA CONVERSION

2010 - The Roth IRA conversion option allows qualifying taxpayers to electively convert some or all of their traditional IRA, SEP, SIMPLE, 401(k), 403(b), or 457(b) savings to Roth IRA . The taxpayer must include the taxable portion of the traditional savings in his or her taxable income in the year of conversion. But once the traditional assets are converted, all future growth within the Roth IRA accumulates on a tax-free basis (assuming the Roth IRA owner takes “qualified distributions”).

Since 1998, Roth IRA conversion option has historically been available only to households with $100,000 or less of Modified Adjusted Gross Income (MAGI). In other words, access to Roth IRA conversions has been limited to those taxpayers who are the least likely to be in a financial position to take advantage of it. But that’s all scheduled to change. Thanks to a little-publicized provision in the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005, the income restriction on Roth IRA conversions is set to be lifted as of January 1, 2010.