Kutchins, Robbins & Diamond, Ltd. Certified Public Accountants and Advisors

Roth IRA Conversions – Are You Aware of These Advantages?

What are the benefits of Roth IRAs compared to Traditional IRAs?

Roth IRAs have a number of advantages over Traditional IRAs:

  • Lower overall taxable income long-term
  • Tax fee, rather than tax-deferred growth
  • No required minimum distributions (RMDs) at age 70 ½
  • Tax free withdrawals for beneficiaries after owner’s death
  • More effective funding of bypass trust
  • Facilitates 3.5% NIIT planning

A major factor in determining if a Roth conversion is favorable for you is if your tax rates will be higher in the future.  This will save you tax dollars.

Here are some additional situations that can benefit you other than tax rates:

  • Income can be accelerated to utilize expiring charitable deduction carryovers, tax credits, and net operating losses
  • Suspends required minimum distribution (RMD) on full conversions.
  • Removes the income taxes on the conversion from your estate.
  • Roth distributions are not taxable — lowering future tax rates. Additionally, distributions are not part of the NIIT or MAGI calculations.

Our professional staff at KRD can help make the calculations and guide you through the decision making process. Contact us today to learn more. 

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