Comments on: How to Make a Roth IRA Conversion

By: Financial Samurai

Financial Samurai — Thu, 24 Sep 2009 23:05:57 +0000

U just wish the government would raise the IRA income cap for contribution limit $500,000 instead of just $105,000.

Doesn’t seem fair someone who is 45 years old and making over $105,000 can’t contribute to his IRA.

By: MoneyNing

MoneyNing — Thu, 24 Sep 2009 22:34:44 +0000

I thought about that argument, but I don’t completely agree. The debt that we carry will probably increase tax rates in the short term, but with countries, one responsible decade and the deficit will be gone (that’s how Canada paid off trillions of debt). Therefore, in a few decades, which most people need to look at (even those who are about to retire as they will live for years), it’s unclear whether taxes will be higher or lower because of deficits and surpluses.

By: Charles

Charles — Thu, 24 Sep 2009 18:48:57 +0000

Most people believe that taxes will go higher because of the massive deficit that the U.S. has. They are issuing debt via treasuries like energizer bunnies, and eventually people will get tired of all this supply. When that happens, watch out.

By: MoneyNing

MoneyNing — Thu, 24 Sep 2009 17:48:14 +0000

If you file electronically with those major online tax services, it should be easy and it will be worth the extra cost of doing so this year. You may also want to find a tax accountant to help with the numbers and see if re-characterizing it back and doing it next year would be beneficial.

By: MoneyNing

MoneyNing — Thu, 24 Sep 2009 17:43:12 +0000

Is there any specific reason why you want to do it in February and not January or March?

By: David@DINKS Finance

David@DINKS Finance — Thu, 24 Sep 2009 17:41:38 +0000

“Inflation – Tax brackets are adjusted for inflation, but none (or at least not many) of the tax deductions are adjusted for inflation. By the time you retire, you may be paying very high taxes as if you are a high income earner even though the income only allows for a very modest lifestyle. ”

And we all should know inflation is likely to get worse, not better, in both the long term and short term.

By: David

David — Thu, 24 Sep 2009 16:54:41 +0000

I did the Roth IRA conversion and it was super easy because the bank didn’t care much about the taxes side of things. It’s the tax filing that is complicated I assume which I will have to do come next April.

By: Craig

Craig — Thu, 24 Sep 2009 15:59:39 +0000

I don’t like paperwork and this is something I will need to do in Feb. Good tips hopefully it’s very easy.

By: Jules @ Lovely Las Vegas

Jules @ Lovely Las Vegas — Thu, 24 Sep 2009 15:09:39 +0000

Thank you for the explanation of this. Definitely must look into it.