Indiana Tax Partner

Proud to be an Indiana-based tax professional helping local clients-- and clients across the US . Taxes may be federal, but personal service matters

Indiana residence- we have you covered!
Out-of-state filers- No problem!
Virtual & in-office options- Always available!

Reach out when you are ready to file with confidence.

COVID-19 Crisis Creates a Silver Lining for Roth IRA Conversions. A Roth conversion is treated as a taxable distribution from your traditional IRA, because you’re deemed to receive a payout from the traditional account with the money then going into the new Roth account.

So, doing a conversion will trigger a bigger federal income tax bill for the conversion year, and maybe a bigger state income tax bill, too. That said, right now might be the best time ever to convert a traditional IRA into a Roth IRA. Here are three reasons why.
1. Current tax rates are low thanks to the TCJA.
2. Your tax rate this year might be lower due to your COVID-19 fallout.
3. A lower IRA balance due to the stock market decline means a lower conversion tax bill.

The Bottom Line

If you do a Roth conversion this year, you will be taxed at today’s “low” rates on the extra income triggered by the conversion.

On the (far bigger) upside, you avoid the potential for higher future tax rates (maybe much higher) on all the post-conversion recovery and future income and gains that will accumulate in your new Roth account.

That’s because qualified Roth withdrawals taken after age 59½ are totally federal-income-tax-free, as long as you’ve had at least one Roth account open for more than five years when withdrawals are taken.

If you leave your Roth IRA to an heir, he or she can take tax-free qualified withdrawals from the inherited account—as long as at least one of your Roth IRAs has been open for more than five years when withdrawals are taken.

The IRS starts processing returns JAN 26th!
Let’s get started!

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One of the most common questions I receive is regarding tax refund garnishment. Well, you can call this automated system and enter your personal information and it will let you know if you have a garnishment against your tax refund.

Check it out!
1-800-304-3107 or you can call the IRS Tax payer advocate Service 1-877-777-4778 if you feel your refund was reduced by error.

Simple!

Let me help you get ahead of that taxman!

Happy New Year!
Download my Tax App
and get started today!

Indiana Tax Partner, LLC | Referral Download Indiana Tax Partner, LLC Mobile App Referral Download