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    allowed to convert a traditional IRA to a Roth IRA (and pay taxes today on the amount you convert), and for many people this makes a lot of financial sense. However, un
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    2006 is a little more than half way over but we have already seen some major changes in the IRA rules. This article will summarize two of these changes and what they mean to you.

    Income Limit for Roth IRA Conversion Repealed

    Clients often ask me whether they should do a traditional IRA or a Roth IRA. Contributions to a traditional IRA are tax deductible while contributions to a Roth IRA are not. Traditional IRAs grow tax deferred (any money you take out is taxed as income) and you must start withdrawing money by April 1 of the year after the year you turn 70 ?. Roth IRAs grow tax free and money doesn’t have to be taken out during your lifetime. You are allowed to convert a traditional IRA to a Roth IRA (and pay taxes today on the amount you convert), and for many people this makes a lot of financial sense. However, und

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    Income Limit for Roth IRA Conversion Repealed

    Clients often ask me whether they should do a traditional IRA or a Roth IRA. Contributions to a traditional IRA are tax deductible while contributions to a Roth IRA are not. Traditional IRAs grow tax deferred (any money you take out is taxed as income) and you must start withdrawing money by April 1 of the year after the year you turn 70 ?. Roth IRAs grow tax free and money doesn’t have to be taken out during your lifetime. You are allowed to convert a traditional IRA to a Roth IRA (and pay taxes today on the amount you convert), and for many people this makes a lot of financial sense. However, un

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    itional IRA are tax deductible while contributions to a Roth IRA are not. Traditional IRAs grow tax deferred (any money you take out is taxed as income) and you must start withdrawing money by April 1 of the year after the year you turn 70 ?. Roth IRAs grow tax free and money doesn’t have to be taken out during your lifetime. You are allowed to convert a traditional IRA to a Roth IRA (and pay taxes today on the amount you convert), and for many people this makes a lot of financial sense. However, un
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    rt withdrawing money by April 1 of the year after the year you turn 70 ?. Roth IRAs grow tax free and money doesn’t have to be taken out during your lifetime. You are allowed to convert a traditional IRA to a Roth IRA (and pay taxes today on the amount you convert), and for many people this makes a lot of financial sense. However, un
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    allowed to convert a traditional IRA to a Roth IRA (and pay taxes today on the amount you convert), and for many people this makes a lot of financial sense. However, under current laws, if you make over $100,000/year you cannot do a Roth conversion.

    Effective in 2010, all taxpayers regardless of income will be able to convert to a Roth IRA. Furthermore, the tax due on conversions done in 2010 can be spread out over two years and paid out in 2011 and 2012.

    Obviously, Congress realizes that Roth IRAs are a good thing and they want to make it as enticing as they can for you to do a conversion. Since this rule opens up the possibility of a Roth conversion to everyone, you should put a note on your calendar to have a discussion with your advisors on January 1, 2010 about whether a Roth conversion makes sense for you.

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