<div dir="ltr"><div class="gmail_default" style="font-family:arial,helvetica,sans-serif;font-size:small">If you convert a traditional IRA to a Roth, you do have to pay for it. There was a short time around the creation of the Roth IRA where you could switch without a penalty<br></div></div><div class="gmail_extra"><br><div class="gmail_quote">On Thu, Mar 17, 2016 at 5:11 PM, Lightner, Jeff <span dir="ltr"><<a href="mailto:JLightner@dsservices.com" target="_blank">JLightner@dsservices.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">Actually this isn't new in the world. They have always reduced your SS benefit based on all other earnings.<br>
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The old rule used be along the lines they'd take away $1 from SS for every $2 you earned.<br>
<br>
I'm not a CPA nor a tax expert but it seems to me your "earnings" in a ROTH are the interest not the money you deposited because as you noted you were already taxed on that.<br>
<br>
This link says clearly the ROTH money isn't taxable:<br>
<a href="http://money.usnews.com/money/retirement/articles/2015/02/09/how-to-reduce-taxes-on-your-social-security-payments" rel="noreferrer" target="_blank">http://money.usnews.com/money/retirement/articles/2015/02/09/how-to-reduce-taxes-on-your-social-security-payments</a><br>
<br>
" However, money withdrawn from Roth accounts in retirement, which is typically not a taxable event, will not contribute to making your Social Security benefit taxable."<br>
<br>
It even suggests you could convert 401(k) and other accounts to ROTH to avoid this taxation on Social Security benefits. Presumably you'd have to pay taxes at the conversion though since the money in a 401(k) or traditional IRA was NOT taxed when it was deposited.<br>
<div class="HOEnZb"><div class="h5"><br>
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-----Original Message-----<br>
From: <a href="mailto:ale-bounces@ale.org">ale-bounces@ale.org</a> [mailto:<a href="mailto:ale-bounces@ale.org">ale-bounces@ale.org</a>] On Behalf Of Sean Kilpatrick<br>
Sent: Thursday, March 17, 2016 12:27 PM<br>
To: Atlanta Linux Enthusiasts<br>
Subject: [ale] [OFF TOPIC] Tax time<br>
<br>
For those of you who file a joint tax return for state and federal AND contribute to a Roth IRA, you might want to talk to a cpa -- soon.<br>
<br>
Why,<br>
<br>
Because one more time our Congress-critters have lied to us.<br>
When you retire and try to draw on the Roth IRA you will find that it is, indeed, taxable -- at about a 21% rate.<br>
So how does this shell game work?<br>
<br>
Your retirement income usually is made up of two main components: your Social Security and Everything Else. The greater the sum of Everything Else, the more of your Social Security income is taxable. The Roth is part of Everything Else. If you run through the worksheets with and without the Roth component of your retirement income you will clearly see that it is the Roth income that is driving up your net tax bill.<br>
Your money is being taxed twice.<br>
<br>
You have 32 days.<br>
<br>
Sean<br>
<br>
<br>
<br>
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