Tax Tip of The Week: FOR RETIREES Tax planning is important for retirees. You can maximize your tax benefits with Roth IRS distributions. Contributions you make to a Roth IRA account are made with after-tax dollars, and you don’t have the option of deducting these contributions from your income. This makes withdrawals from a Roth IRA during retirement totally tax-free. Roth IRA withdrawals give the best of both worlds to retirees. You get regular retirement income and no income tax. If you want to move your retirement funds from one type of plan to another, the IRS allows you to do this. You can, for example, convert funds from your 401(k) account or traditional IRA account to a Roth account. Re-characterizing your funds will reduce future tax liabilities, but in the year of the conversion, you’ll pay tax on any pretax funds you convert.
Posted on: Mon, 02 Jun 2014 17:22:08 +0000
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