Quote:
|
Originally Posted by alnorth
ChiefsfaninPA, your post is pretty good and is 100% consistent with how I understand tax law.
To make things even more confusing, our greedy cash-starved government has passed a law which will allow anyone to do Roth conversions in 2010 (I think thats the year), regardless of income.
The only people who should be making these conversions and contributions are those who already qualify to do so. If someone has a huge IRA worth several hundred thousand, makes over 150,000 per year, and decides to convert it to a Roth, then that person is an idiot, with a few rare obscure exceptions for estate planning strategy for heirs, and that would only apply to millionaires.
The government is counting on a few stupid people voluntarily accelerating a 35% tax hit now, and I'm sure theyll get plenty.
|
In 2010 there are going to be a lot of smart rich people making this conversion on untaxed money (old 401ks, 403b, 457b and traditional IRA's)to the Roth and NEVER EVER pay any taxes on this money. I have a traditional with some coin in them that I am going to convert myself for this reason. If people really understood money, they would be shocked at the way the tax laws and savings accounts and savings rates are set up. Like for instance most people invest in stocks or mutual funds. But the elite invest in hybrid mutual funds which almost guarantee a return on their money and government bonds at a huge discount. And it is all legal and written in the tax law.