The passage of the new tax bill is a golden opportunity for you to convert your traditional individual retirement account into a ROTH IRA. Why? The bill reduced multiple individual income tax brackets, so if you convert your traditional IRA to a ROTH and immediately pay taxes on those funds, “you will be paying at a lower rate then before.” Contributions to traditional IRAs are tax-deductible now because you will pay income tax on them later, when you withdraw the funds. But withdrawals from ROTH accounts are tax-free, because contributions are taxed upfront at current tax rates. Settle your bill when it’s the lowest it’ll ever be…there will never be a better time than now.
Let Bourke Accounting help you will all of your financial needs. Need to talk about how an IRA will effect your taxes? Come on in and see us. Give us a call at 502-451-8773, or stop in for a visit. See you soon!