Tag Archives: Roth

How the new tax law creates a ‘perfect storm’ for Roth IRA conversions

While the new Tax Cuts and Jobs Act (TCJA) includes one negative change for Roth IRAs, they are still pretty wonderful. Here’s what you need to know about Roth IRAs and especially Roth IRA conversions in the post-TCJA world.

The two most-important Roth IRA tax advantages are:
Unlike traditional IRA withdrawals, qualified Roth IRA withdrawals are federal-income-tax-free and usually state-income-tax-free too. What is a qualified withdrawal? It’s one that is taken after you, as the Roth account owner, have met both of the following requirements:

1. You’ve had at least one Roth IRA open for over five years.
2. You’ve reached age 59½ or become disabled or dead.

I need to investigate if item 1 above is correct. You only need to have ‘at least on Roth IRA open for over five years’?

Read the rest here.