Conclusion of Roth Conversion: Tax Aspects
A Roth conversion provides tax-deferred access to tax-free withdrawals for many individuals. However, a recent House proposal could end this strategy of wealthy earners . The Build Back Better Act, a proposed piece of legislation, would prohibit Roth conversions to IRAs and 401(k) plans for those earning more than $400,000 annually. The so-called "mega backdoor Roth" mutations, which allow investors to make up to $38,500 in additional post-tax contributions to a Roth account, would also be eliminated. Several distinct tax factors may affect the conclusion of your Roth conversion. In order to determine the most appropriate course of action, you should consult a certified tax expert. Your taxable account profile is one factor to consider. In order to pay the conversion tax, you may have to liquidate a significant portion of your taxable assets held in a brokerage account. Your income is an additional factor. If your tax rate this year is lower than usual, you can avoid paying a